Judge tosses Netflix, Walmart conspiracy claim

Firms did not partner to control DVD rentals and sales

Netflix

Netflix and Walmart did not conspire to dominate the DVD-by-post market, a US judge has ruled.

Earlier this week, US District Judge Phyllis Hamilton said that Walmart's share of that market was so small that its exit from the business, alleged in a class action lawsuit to have been made in agreement with Netflix, would not have aided Netflix in any way.

Walmart had just 1.5 per cent of the mail rental market, the ruling states.

Nor would Netflix's decision to stop selling DVDs, also alleged to have been part of a covert deal with Walmart, have benefitted the retail colossus, the judge said.

The lawsuit was filed against Netflix and Walmart in January 2009. Other plaintiffs signed up in agreement with the lawsuit claims, and it was soon granted class action status.

At that time, Blockbuster's own DVDs-by-post scheme had gained 17 per cent of the market, according to the ruling.

“The court concludes that no reasonable juror could believe that Netflix would have lowered its [rental plan] to $15.99 in response to continued competition from Walmart, whose [comparable plan] was set at $17.49 – particularly when those facts demonstrate that Netflix chose not to lower its price in the face of Blockbuster’s $14.99 price cut, despite the fact that Blockbuster had a higher market share than Walmart,” Hamilton wrote. ®

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