If you are a displaced Blockbuster customer and you are looking for a new home, you probably came across Netflix Underground while looking for information about Netflix. If you are considering singing up with Netflix, make sure to do plenty of research before you give them your credit card or bank information. If you browse through the years of articles on this site, you will find Netflix has a sketchy reputation built around more than a decade of sleazy corporate behavior. Make a list of everything you hated about Blockbuster Online and multiply that by three.
Yes, Blockbuster was a profoundly lousy company with many sleazy tactics, but many of their tricks in the DVD-by-mail business were pioneered by Netflix long before Blockbuster Online even mailed their first DVD. If you are a Blockbuster refugee and you are considering giving Netflix a try, do yourself a favor and first browse this site or do some Internet searches with the following terms.
Netflix throttling
Netflix lawsuit
Netflix credit card charges
Netflix missing DVD charge
Netflix cancellation problem
Netflix delay
Netflix tactics
Netflix staging media event
Netflix price increase
Netflix shipping
What you will find will not be pretty, but at least you will be armed with some knowledge before making a decision that could lead to a lot unnecessary aggravation.
Showing posts with label lawsuit. Show all posts
Showing posts with label lawsuit. Show all posts
1/05/2011
Netflix Facing Class Action Lawsuit for Alleged Antitrust Violation with Walmart
No surprise, but Netflix is facing another class action lawsuit. This lawsuit is not due to anything you might have assumed, however. Rather than Netflix being sued over the company's wide array of suspicious business practices, Netflix is being sued for something the company allegedly did in 2005.
If you will think back to that time, Walmart was in the DVD-by-mail business. Walmart shuttered its video rental business and effectively surrendered its subscribers to Netflix. Netflix.com promoted Walmart for DVD sales. Walmart.com promoted Netflix for DVD rentals. It seemed like a wonderful marriage.
The plaintiffs are alleging that Netflix's CEO, Reed Hastings, met with the CEO of Walmart during that period, John Fleming, and conspired to strategically divide the home video market. According to the alleged agreement, Netflix would not sell DVDs (presumably new DVDs) if Walmart would agree to stop renting DVDs. That way, Walmart could secure a larger share of video sales and Netflix could secure a larger share of video rentals. Most importantly, the companies would not have to compete against each other and drive down each other's profits in price wars.
From a business point-of-view, this sort of arrangement makes perfect sense. Why fight your competitor in price wars over two different markets, when you can simply call a truce with your competitor that will allow each of you to have great control over an individual market? After all, as a business leader, which would you rather have: two highly competitive markets with low profit margins or one monopolized market with a high profit margin? If you do not have to compete as much, you can charge higher prices. Higher prices may hurt consumers, but higher prices normally translate to higher profits when proper competition does not exist in any given market.
The most important thing to consider about this alleged conspiracy is that it is most likely illegal under antitrust laws. These antitrust laws are in place to protect you, the consumer, from price fixing, collusion, and other similar predatory business practices. Walmart certainly did not want to be in a big trial over this. Walmart has already settled for an amount that may be $29 to $40 million. At some point, those included in the class action lawsuit will probably receive checks or Walmart gift cards as part of the settlement.
It is unclear what Netflix is going to do about this. Netflix is potentially just as guilty as Walmart in this alleged conspiracy. Netflix, however, may have much more at stake in this controversy. DVD sales makes up only a small fraction of Walmart's profits. If Walmart lost a lawsuit over inflated DVD sale prices, it would mean a hit against just one of its many businesses.
With Netflix, however, this is a different story. Netflix largely exists on video rentals. Videos are not just one business for Netflix, videos are Netflix's business. If the plaintiffs can prove Netflix has been able to charge inflated prices ever since the alleged Walmart agreement in 2005, the penalties could be tremendous. U.S. District Judge Phyllis Hamilton in Oakland, CA has stated, "As a result, millions of Netflix subscribers allegedly paid supracompetitive prices."
Think about the millions and millions of subscribers who have paid monthly subscription fees to Netflix since 2005. If Judge Hamilton or some other judge were to determine those subscription fees were inflated by just 10% as a result of an illegal pact with Walmart, the amounts could be staggering. The penalties could be crippling.
The federal trial is currently set for January 2012. Certainly, Netflix lawyers and managers are carefully debating their options. Netflix must tread carefully on this issue. Given this lawsuit could potentially involve every Netflix subscriber since 2005, even the slightest misstep could lead to a nasty stumble for Netflix.
If you will think back to that time, Walmart was in the DVD-by-mail business. Walmart shuttered its video rental business and effectively surrendered its subscribers to Netflix. Netflix.com promoted Walmart for DVD sales. Walmart.com promoted Netflix for DVD rentals. It seemed like a wonderful marriage.
The plaintiffs are alleging that Netflix's CEO, Reed Hastings, met with the CEO of Walmart during that period, John Fleming, and conspired to strategically divide the home video market. According to the alleged agreement, Netflix would not sell DVDs (presumably new DVDs) if Walmart would agree to stop renting DVDs. That way, Walmart could secure a larger share of video sales and Netflix could secure a larger share of video rentals. Most importantly, the companies would not have to compete against each other and drive down each other's profits in price wars.
From a business point-of-view, this sort of arrangement makes perfect sense. Why fight your competitor in price wars over two different markets, when you can simply call a truce with your competitor that will allow each of you to have great control over an individual market? After all, as a business leader, which would you rather have: two highly competitive markets with low profit margins or one monopolized market with a high profit margin? If you do not have to compete as much, you can charge higher prices. Higher prices may hurt consumers, but higher prices normally translate to higher profits when proper competition does not exist in any given market.
The most important thing to consider about this alleged conspiracy is that it is most likely illegal under antitrust laws. These antitrust laws are in place to protect you, the consumer, from price fixing, collusion, and other similar predatory business practices. Walmart certainly did not want to be in a big trial over this. Walmart has already settled for an amount that may be $29 to $40 million. At some point, those included in the class action lawsuit will probably receive checks or Walmart gift cards as part of the settlement.
It is unclear what Netflix is going to do about this. Netflix is potentially just as guilty as Walmart in this alleged conspiracy. Netflix, however, may have much more at stake in this controversy. DVD sales makes up only a small fraction of Walmart's profits. If Walmart lost a lawsuit over inflated DVD sale prices, it would mean a hit against just one of its many businesses.
With Netflix, however, this is a different story. Netflix largely exists on video rentals. Videos are not just one business for Netflix, videos are Netflix's business. If the plaintiffs can prove Netflix has been able to charge inflated prices ever since the alleged Walmart agreement in 2005, the penalties could be tremendous. U.S. District Judge Phyllis Hamilton in Oakland, CA has stated, "As a result, millions of Netflix subscribers allegedly paid supracompetitive prices."
Think about the millions and millions of subscribers who have paid monthly subscription fees to Netflix since 2005. If Judge Hamilton or some other judge were to determine those subscription fees were inflated by just 10% as a result of an illegal pact with Walmart, the amounts could be staggering. The penalties could be crippling.
The federal trial is currently set for January 2012. Certainly, Netflix lawyers and managers are carefully debating their options. Netflix must tread carefully on this issue. Given this lawsuit could potentially involve every Netflix subscriber since 2005, even the slightest misstep could lead to a nasty stumble for Netflix.
12/19/2009
Netflix Is Outing You, Gay Communist Serial Killer
Wired is running an article by Ryan Singel about a privacy breech at Netflix and the resulting lawsuit: Doe v. Netflix. At issue is Netflix's intentional release of supposedly anonymous subscriber data to the public for a movie recommendations improvement contest. Concerned parties, however, are worried the data could be easily used to identify specific people by cross-referencing the data with other sources.
The primary concern is one's movie-watching habits and preferences could provide tremendously strong hints about one's sexual interests, religious beliefs, political affiliations, etc. For example, if you have rented Brokeback Mountain, Milk, and The Adventures of Priscilla, Queen of the Desert from Netflix, this data could potentially be used to indicate you have homosexual interests (whether you do or not). Perhaps you rented Lolita, The Lover, and Pretty Baby from Netflix. A nosey person might conclude you have an interest in underage girls. Maybe you rented movies about Ted Bundy, John Wayne Gacy, David Berkowitz, etc. from Netflix. You might be identified as a person obsessed with serial killers. Perhaps you rented movies about Che Guevara, Chairman Mao, and Joseph Stalin from Netflix. You could be viewed as a person with Communist sympathies. The examples could go on and on.
Your movie-watching habits and preferences say a lot about you. What they say could be inaccurate, but they do say things. In the hands of a malicious person, your viewing data can be used to reveal all sorts of information about you. Whether these revelations are true or not, the information could be used to embarrass, harass, persecute, or investigate you.
If you are concerned that Netflix has compromised your privacy by releasing your personal movie-watching habits and preferences, consider contacting an attorney. At the very least, contact Netflix to find out what they are doing with your personal information. Make sure Netflix responds to you in writing. It is your information. You have a right to know. You have a right to hold Netflix accountable for this careless behavior.
The primary concern is one's movie-watching habits and preferences could provide tremendously strong hints about one's sexual interests, religious beliefs, political affiliations, etc. For example, if you have rented Brokeback Mountain, Milk, and The Adventures of Priscilla, Queen of the Desert from Netflix, this data could potentially be used to indicate you have homosexual interests (whether you do or not). Perhaps you rented Lolita, The Lover, and Pretty Baby from Netflix. A nosey person might conclude you have an interest in underage girls. Maybe you rented movies about Ted Bundy, John Wayne Gacy, David Berkowitz, etc. from Netflix. You might be identified as a person obsessed with serial killers. Perhaps you rented movies about Che Guevara, Chairman Mao, and Joseph Stalin from Netflix. You could be viewed as a person with Communist sympathies. The examples could go on and on.
Your movie-watching habits and preferences say a lot about you. What they say could be inaccurate, but they do say things. In the hands of a malicious person, your viewing data can be used to reveal all sorts of information about you. Whether these revelations are true or not, the information could be used to embarrass, harass, persecute, or investigate you.
If you are concerned that Netflix has compromised your privacy by releasing your personal movie-watching habits and preferences, consider contacting an attorney. At the very least, contact Netflix to find out what they are doing with your personal information. Make sure Netflix responds to you in writing. It is your information. You have a right to know. You have a right to hold Netflix accountable for this careless behavior.
8/05/2008
Reporting Netflix Class Action Lawsuit Settlement Violations
If you are exercising your Netflix class action lawsuit settlement benefits and notice any potential violations of the settlement terms or anything unusual, you may wish to contact the Superior Court of California, County of San Francisco (www.sfgov.org/site/courts_index.asp) in regard to the Frank Chavez vs. Netflix case (Case Number: CGC-04-434884). Judge Thomas Mellon was involved in the settlement.
The attorneys for Frank Chavez are Adam Gutride and Seth Safier of Gutride Safier LLP (www.gutridesafier.com).
Click here to read about your settlement benefits.
Click here to read the Frank Chavez vs. Netflix settlement agreement.
The attorneys for Frank Chavez are Adam Gutride and Seth Safier of Gutride Safier LLP (www.gutridesafier.com).
Click here to read about your settlement benefits.
Click here to read the Frank Chavez vs. Netflix settlement agreement.
8/04/2008
Missing-DVD Pitfall in the Netflix Class Action Lawsuit Settlement
If you intend to exercise your settlement benefits from the Chavez vs. Netflix class action lawsuit, be very cautious about the missing-DVD pitfall in the settlement. If you accept DVDs from Netflix, you will have to make certain you return the DVDs within the allotted timeframe and that Netflix acknowledges the returns. Otherwise, you risk being charged for the missing DVDs.
Many former Netflix subscribers have complained their credit cards were charged for missing DVDs after canceling their Netflix accounts. The reports of this practice are so common that Netflix looks suspiciously as if they might be pretending to not receive DVDs from canceling subscribers just to squeeze extra money out of each departing subscriber. This practice has never been proven, but the occurrences raise suspicion.
If this dishonest business practice does exist, the Chavez vs. Netflix settlement beneficiaries are at a considerable risk of being charged for DVDs which Netflix does not acknowledge receiving. A beneficiary ending a three-out plan could easily be on the hook for $60 or more after his/her free subscription month. That is a lot to pay for one free month of DVDs.
If you are concerned that Netflix may fraudulently charge you for DVDs you actually returned, you may reduce your risk by taking some extra precautions. The steps below could help you dispute any illegitimate charges on your credit card from Netflix.
If you feel Netflix is a completely honest and ethical company who would never attempt to cheat you, then none of these precautions are necessary. However, if you think Netflix may be a shady and greedy company, which is always looking for ways to milk its customers, be cautious. If Netflix fooled you once, shame on them. If Netflix fools you twice, shame on you.
Many former Netflix subscribers have complained their credit cards were charged for missing DVDs after canceling their Netflix accounts. The reports of this practice are so common that Netflix looks suspiciously as if they might be pretending to not receive DVDs from canceling subscribers just to squeeze extra money out of each departing subscriber. This practice has never been proven, but the occurrences raise suspicion.
If this dishonest business practice does exist, the Chavez vs. Netflix settlement beneficiaries are at a considerable risk of being charged for DVDs which Netflix does not acknowledge receiving. A beneficiary ending a three-out plan could easily be on the hook for $60 or more after his/her free subscription month. That is a lot to pay for one free month of DVDs.
If you are concerned that Netflix may fraudulently charge you for DVDs you actually returned, you may reduce your risk by taking some extra precautions. The steps below could help you dispute any illegitimate charges on your credit card from Netflix.
- A few days before your free subscription ends, delete every title from your queue. This should prevent Netflix from shipping more DVDs to you.
- At least one day before your subscription ends, use the Netflix Web site to report as missing any DVDs you have not yet received.
- Return all of your DVDs to Netflix within the allotted timeframe, mailing the DVDs using USPS tracking numbers and/or signature verification. This will provide proof of return.
- Save full documentation of your actions.
If you feel Netflix is a completely honest and ethical company who would never attempt to cheat you, then none of these precautions are necessary. However, if you think Netflix may be a shady and greedy company, which is always looking for ways to milk its customers, be cautious. If Netflix fooled you once, shame on them. If Netflix fools you twice, shame on you.
5/14/2006
Another Chance to Opt-Out of the Netflix Settlement
As expected, the Frank Chavez v. Netflix, Inc. settlement (www.netflix.com/settlement) has been revised slightly to eliminate the previously proposed automatic billing element. This revision to the settlement terms gives you another opportunity to exclude yourself from the class and preserve your right to sue Netflix in a separate case.
Note that you may exclude yourself even if you had already joined the settlement class. If you wish to exclude yourself from the class, you must send a letter stating that you wish to opt-out of the settlement. The deadline is June 26, 2006.
For information on how to opt-out, see Page 6 Item B of the Notice of Amended Class Action Settlement. Follow the directions carefully or your request will be considered invalid.
Note that you may exclude yourself even if you had already joined the settlement class. If you wish to exclude yourself from the class, you must send a letter stating that you wish to opt-out of the settlement. The deadline is June 26, 2006.
For information on how to opt-out, see Page 6 Item B of the Notice of Amended Class Action Settlement. Follow the directions carefully or your request will be considered invalid.
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