Netflix sued over Warner Brothers new release delay

March 10, 2010

States Looking Into Collecting Sales Tax From Large Online RetailersA New York woman has filed a class action lawsuit against Netflix and Warner Home Video over the two companies’ recent agreement to delay new releases’ availability through the rental service for 28 days.

Back in January, Netflix and Warner Home Video made an agreement for the rental company to withhold new releases from their customers for 28 days after the initial on-sale date of the films.  The reason for this was it was to add pressure to DVD kiosk company Redbox making a similar deal, and Wanrers is also thinking this will help stem off some of the lost sales the video companies have been suffering in their retail divisions.

As a result, on March 3,  Susan Uman, a woman in New York, filed a class action suit the U.S. District Court for Southern New York in Manhattan against both Netflix and Warner Home Video over the agreement.  According to the New York Daily News, Ms. Uman’s claims are that the agreement is a “scheme to restrain trade.” One of Uman’s lawyers, Marian Rosner of Wolf Popper in Manhattan said, “It is Netflix subscribers who are harmed by this illegal conspiracy.”

Neither Netflix or Warner Home Video are offering comment at this time.

While we certainly aren’t lawyers around here, we think this case has about zero chance of success.  If this was illegal, then every cell phone company could be sued for exclusivity deals of various phones.  Seen anyone suing AT&T yet over its exclusivity deal with Apple for the iPhone?  Exclusivity deals, on shelf dates and more have been a standard of business for many, many years, and this one is no different than many that have come before it.

We’ll be sure to keep you updated as more information becomes available.

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