Netflix and Wal-Mart Charged with Trying to Create Monopoly

San Francisco – Consumers have charged both Netflix Inc. and Wal-Mart Stores Inc. of conspiring to make a monopoly for online video rentals. The lawsuit claimed that the monopoly would result in increased prices.

According to the lawsuit filed in San Francisco federal court last January 2, the two companies have agreed in 2005 that Wal-Mart, which is the largest retailer in the world, would close its rental business online and refer customers to Netflix, which would endorse the DVD movie sales of Wal-Mart.

The complaint also alleged that the agreement was aimed at abolishing competition, enabling Netflix to sustain monopoly power, and drive Blockbuster Inc. to increase subscription rental prices by $3 to meet the higher prices of Netflix.