A few years ago, Netflix and Wal-Mart allegedly entered an agreement where Wal-Mart agreed to exist the DVD rental business and promote Netflix’s service and Netflix would not sell new DVDs to compete with Wal-Mart. A group of Netflix customers have banded together to enter a class action anti-trust lawsuit against the two companies for this practice, which allegedly allowed Netflix to gain dominance and raise customers’ fees.
Wal-Mart has agreed to settle the lawsuit. The company will pay a settlement fee of $27,250,000, with some of the proceeds going to affected customers. Netflix, on the other hand, has not yet stopped fighting the lawsuit.
You are included in the Wal-Mart settlement class if you live in the United States or Puerto Rico and you paid a subscription fee to Netflix to rent DVDs online anytime from May 19, 2005 through September 2, 2011. Any customer who had only a free Netflix trial does not qualify. You may receive a dollar or two from this settlement, but in order to receive your benefit, you must file a claim. You can receive the payment in cash or a gift card.
The $27 million from Wal-Mart will be divided between lawyers, who will receive up to 25% of the payment plus additional costs of up to $1.7 million, administration expenses, and fees to class representatives at $5,000 a piece. The remainder will be divided equally between all settlement class members who file a claim. To get an idea of how many customers might need to split an estimated $18 million, Netflix had 24 million customers in the United States at the end of September.
Netflix is still fighting the lawsuit. They might eventually settle, and if they do, customers who would qualify for benefits include any person or entity in the United States that paid a subscription fee to Netflix anytime from May 19, 2005 to September 30, 2010. If there are benefits to receive, class members will not need to take any action. Any class members who would like to excise themselves from the lawsuit or potential settlement and reserve the right to sue Netflix regarding this issue will need to mail a letter to opt out.
The official website for the Netflix Wal-Mart class action lawsuit regarding DVD sales is onlinedvdclass.com.
Published or updated November 17, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.