updated 05:05 pm EST, Fri January 16, 2009
Walmart, Netflix lawsuit
What sounds like a frivolous lawsuit was filed in a California court at the start of this year against retail giant Walmart and online video rental company Netflix. The lawsuit alleges that, by letting Netflix take over its struggling online DVD rental business nearly four years ago, the two companies have created a monopoly and have driven Blockbuster to raise its subscription rental prices by $3 to match Netflix' pricing scheme.
Walmart launched its online DVD rental business in 2002 and when it discovered keeping customers subscribed was a challenge, it closed the operation in 2005 and refer customers to Netflix, which would in return promote Walmart's DVD movie sales. The other challenge facing the plaintiffs is proving that Netflix' DVD rental operations have benefitted from the deal, as opposed to its other businesses that include downloadable rentals, subscriptions and VOD services.
None of the three companies involved have made a public comment on the lawsuit. [via TechDirt]