Legal Issues

by Mike Masnick

Is This A Class Action Settlement... Or A Marketing Promotion?

from the seems-phishy dept

Thanks to both Todd and Jim for letting us know about the latest "settlement" of the class action lawsuit against Netflix. The word "settlement" has to go in quotes, because once you read the details, it makes you wonder what kind of settlement it really is. As Todd pointed out, the settlement seemed more like a phishing scam than anything else, and he never felt particularly "injured" by the fact that Netflix advertised "unlimited" rentals and "one day delivery." The settlement means that Netflix customers can get a free one month upgrade (4 movies instead of 3), but after a month, if you don't manually downgrade, your fees go up. If you're a returning customer, you can get a free month (which, apparently, was a promotion they were already offering). So, that certainly sounds like it's more of a "promotion" designed to get back old customers and get existing customers to upgrade than any "settlement." Of course, as with any promotion, there is a "fee" for Netflix. The lawyers who worked on the case are getting $2.5 million out of it. Perhaps that's the new law firm strategy: take on Madison Avenue by setting up "promotions" that appear to be class action settlements.

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  1. identicon
    Richard, 2 Nov 2005 @ 11:03am

    Re: Even worse for real old customers!

    Actually in the documentation the option we will choose is option 2.
    Option 2. Do Nothing
    If you do not wish to receive the benefit, do nothing. You will not receive the benefit but will remain a Class Member. You therefore waive your right to bring a separate lawsuit against Netflix concerning the Released Claims.

    Like almost all class action suits if you do nothing you net nothing and remember netflix is going to spin these upgrades as a loss so I have to actually sign up to benifit from the suit.

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