January 7, 2009 / 2:14 PM / in 9 years

Wal-Mart, Netflix sued over online video rentals

NEW YORK, Jan 7 (Reuters) - Wal-Mart Stores Inc (WMT.N) and Netflix Inc (NFLX.O) have been named in a consumer lawsuit accusing the two companies of trying to build a monopoly for online DVD rentals.

In a complaint filed on Jan 2 in the U.S. District Court for the Northern District of California, the plaintiffs, led by San Francisco-based Andrea Resnick, allege that the companies unreasonably restrained trade, sending up prices.

Wal-Mart spokeswoman Daphne Moore said the world’s largest retailer has received the complaint, is reviewing it, and will respond to the court at the appropriate time.

A spokesman for Netflix, the online video rental company, declined to comment.

The companies agreed in 2005 that Wal-Mart would close its online rental business and refer customers to Netflix, which in turn would promote Wal-Mart’s DVD movie sales, the plaintiffs allege.

    The agreement enabled Netflix to maintain monopoly power and led rival Blockbuster Inc BBI.N to raise subscription rental prices, according to the suit, which seeks class-action status. (Reporting by Martinne Geller in New York and Ajay Kamalakaran in Bangalore; Editing by Derek Caney)

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