Law is a funny field, and sometimes you encounter really nice stories.
Paidcontent.org , the Guardian's subsidiary-with-a-misleading-name specializing with the economics of the digital age, told of an interesting settlement and an even more interesting background.
In a San Francisco ruling a class action suit accusing Netflix of conspiring with wal-mart on DVDs price fixing was rejected. One funny thing about this decision is that the other member of the alleged conspiracy, Wal-mart, reached a settlement of this suit earlier this year. Wal-Mart has anounced it had set aside $27 million and had provided a website with the terms of collection.
The Netflix ruling, by U.S. District Judge Phyllis Hamilton, was summarized with the following arguments -
(1) "The existence of a promotion agreement between the two companies coupled with Wal-Mart’s decision to exit the online DVD market shortly after, was not enough to establish an automatic antitrust violation."
(2) "A court would normally determine the effects of the agreement on the market—but there was no reason to do so, considering wal-mart tiny share of the market at the time (1.5%), and much more aggressive competition by significantly larger market players as blockbaster (17% market share at the time and suggesting deals at lower prices than Netflix).
So, why did wal-mart settle ? Paidcontent's Jeff Roberts believes that the ruling "seems to provide more support to the theory that Wal-Mart used the settlement process to gain access to Netflix customers at a time when it’s making a fresh attempt to move in on the online DVD market through its recently-acquired streaming service Vudu."
Netflix has been claiming all along that Wal-mart's settlement was a cynical marketing ploy being "the equivalent of a marketing campaign that costs wal-mart only 68 cents per potential customer.”
Reading the email Wal-mart got to send to many Netflix subscribers and considering the impacts of these legal proceedings on Netflix one has to take one's hat off to Wal-mart's legal team:
Not only were they able to dodge the nationawide gender discrimination class action suit earlier this year
and break a national-scale legal problem into a state, district or branch scope,
but it seems that with the Netflix settlement they have displayed a truly enviable feat:
How a seemingly lost legal battle can actually get your client a desired result.
The ruling can be viewed here. Sadly, it appears to be working better in IExplorer than other browsers.
Paidcontent.org , the Guardian's subsidiary-with-a-misleading-name specializing with the economics of the digital age, told of an interesting settlement and an even more interesting background.
In a San Francisco ruling a class action suit accusing Netflix of conspiring with wal-mart on DVDs price fixing was rejected. One funny thing about this decision is that the other member of the alleged conspiracy, Wal-mart, reached a settlement of this suit earlier this year. Wal-Mart has anounced it had set aside $27 million and had provided a website with the terms of collection.
The Netflix ruling, by U.S. District Judge Phyllis Hamilton, was summarized with the following arguments -
(1) "The existence of a promotion agreement between the two companies coupled with Wal-Mart’s decision to exit the online DVD market shortly after, was not enough to establish an automatic antitrust violation."
(2) "A court would normally determine the effects of the agreement on the market—but there was no reason to do so, considering wal-mart tiny share of the market at the time (1.5%), and much more aggressive competition by significantly larger market players as blockbaster (17% market share at the time and suggesting deals at lower prices than Netflix).
So, why did wal-mart settle ? Paidcontent's Jeff Roberts believes that the ruling "seems to provide more support to the theory that Wal-Mart used the settlement process to gain access to Netflix customers at a time when it’s making a fresh attempt to move in on the online DVD market through its recently-acquired streaming service Vudu."
Netflix has been claiming all along that Wal-mart's settlement was a cynical marketing ploy being "the equivalent of a marketing campaign that costs wal-mart only 68 cents per potential customer.”
Reading the email Wal-mart got to send to many Netflix subscribers and considering the impacts of these legal proceedings on Netflix one has to take one's hat off to Wal-mart's legal team:
Not only were they able to dodge the nationawide gender discrimination class action suit earlier this year
and break a national-scale legal problem into a state, district or branch scope,
but it seems that with the Netflix settlement they have displayed a truly enviable feat:
How a seemingly lost legal battle can actually get your client a desired result.
The ruling can be viewed here. Sadly, it appears to be working better in IExplorer than other browsers.
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