Wal-Mart, Netflix sued over DVD

2009-01-08 14:05

Martinne Geller and Ajay Kamalakaran

New York - Wal-Mart Stores Inc and internet DVD rental company Netflix Inc have been named in a consumer lawsuit accusing the two companies of trying to build a monopoly for online DVD rentals.

In a complaint filed on January 2 in the US District Court for the Northern District of California, the plaintiffs, led by San Francisco-based Andrea Resnick, allege that the companies unreasonably restrained trade, driving up prices.

Wal-Mart spokesperson Daphne Moore said the world's largest retailer has received the complaint, is reviewing it, and will respond to the court at the appropriate time.

A spokesperson for Netflix, the online video rental company, declined to comment.

The companies agreed in 2005 that Wal-Mart would close its online rental business and refer customers to Netflix, which in turn would promote Wal-Mart's DVD movie sales, the plaintiffs allege.

The agreement enabled Netflix to maintain monopoly power and led rival Blockbuster Inc to raise subscription rental prices, according to the suit, which seeks class-action status.

- Reuters