Netflix subscribers offered class-action payout from Wal-Mart

Millions of current and former Netflix customers woke up Nov 16 to an e-mail about a class-action lawsuit involving the price of online DVD rentals.

It's legit, and it's the latest twist in a legal saga that started two years ago. In May 2005, Wal-Mart and Netflix struck a pact: Wal-Mart would scrap its struggling DVDs-by-mail subscription service and instead encourage its customers to sign on with Netflix. In return, Netflix agreed to promote Wal-Mart's DVD sales business. But in 2009, a group of Netflix subscribers banded together and filed a lawsuit charging the two companies with collusion. The gist of their complaint is that the two companies agreed to carve up the market and stay off each other’s turf: DVD rentals for Netflix and DVD sales for Wal-Mart. The deal helped Netflix entrench itself as the market's dominant player and raise its subscription prices, the lawsuit alleges. Last year, a California judge certified the lawsuit as a class action, bringing Netflix's entire subscriber base into the lawsuit. He has not yet ruled on the merits of the case. Wal-Mart decided to take its chips off the table. It agreed earlier this year to settle the case, without admitting any fault. Netflix is continuing to fight and remains in litigation.