Walmart Netflix Settlement: Walmart Agrees To Settle In Netflix Class Action Suit

Walmart Agrees To Pay Up In Netflix Class Action Suit

Walmart has agreed to settle a class action lawsuit involving a deal it made with Netflix in 2005.

According to the suit's organizers, who revealed the news in an email to lawsuit participants last night, Wal-Mart will pay $27.25 million in cash and gift cards. CNN points out that most of that money will end up in the lawyers' pockets, while TIME raises the issue that if Walmart pays up in gift card form, the settlement will be more of a marketing ploy than a punishment.

Netflix previously voiced its own complaints about the settlement, which a California court approved in September. Netflix called the settlement "the equivalent of a marketing campaign that costs Walmart only 68 cents per potential customer."

Netflix and Walmart penned their ill-fated deal back in 2005. According to a press release from that year, the agreement would have boosted Netflix subscriptions and Walmart DVD sales. At the time, Walmart had been operating its own DVDs-by-mail service, but with little success. So, Netflix agreed not to sell DVDs as long as Walmart agreed to shut down its DVD mailing business. Each company would also promote the other's service.

Netflix subscribers filed the lawsuit against the two companies in 2009, charging that they "improperly entered into an unlawful market allocation agreement" which violated anti-trust laws.

Netflix has not agreed to settle.

For more information about the suit, check out Users can join the lawsuit until February 12th, 2012. In March, the judge overseeing the case will decide whether to uphold or reject the deal.

Walmart did not respond to a request for comment.

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