Antitrust suit against Netflix thrown out

November 25th, 2011 - 7:38 pm ICT by Aishwarya Bhatt  

Washington, Nov 25 (THAINDIAN NEWS) A judge on Tuesday threw out the antitrust suit brought against media streaming outlet Netflix. The suit which was filed in 2009 by eight individuals was thrown out because the judge said the plaintiffs could not prove their case against the company.

An antitrust trial was tentatively set for January but with the case cancelled, the trial might as well not come on. The suit follows an agreement between Walmart and Netflix in 2005.

With news that Amazon was preparing to enter the DVD online rental service, Netflix needed to protect their market share. It was around the same time that Blockbuster joined the competition. Netflix then contacted Walmart and urged the company to leave the DVD online rental service. The two then came up with what became known as “Promotion Agreement.”

Under that agreement, Walmart would exit the service and send their existing customers to Netflix. As it later turned out, Amazon didn’t enter the competition and Blockbuster’s challenge crumbled.

On Tuesday, U.S. District Judge Phyllis Hamilton told reporters that, “The Promotion Agreement on its face discloses an agreement by both parties to undertake cross-promotional efforts with respect to each other’s complementary online DVD rental and sales services, in light of Walmart’s independent decision to exit the DVD rental market.”

This obviously is a huge win for the giant online media rental service provider. The suit was seeking damages in the excess of $654 million.

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