Thursday, August 14, 2008


I've been a happy Netflix user for a long time. But someone out there named Frank Chavez sure wasn't and sued Netflix for breach of contract, amongst other things. And a whole bunch of other people joined Chavez to become a class, and somehow this class became five and half million people, and I became part of it, too. Chances are really good that you are as well. The suit has been settled and there are a variety of different settlement benefits. I'll be getting a free month at an upgraded plan, which is swell with me.

Despite the fact that I am a class member and received an email from Netflix about how to claim my benefit, I was troubled by the fact that even after reading their email, I couldn't figure out what exactly this lawsuit was about. For example: the email from Netflix contains some FAQs. One of them says, "What is this lawsuit about?" and the answer links you to the following section of an 87 page court document :

1.2. In the Litigation, Class Representative alleged that since April of 2004 he had been a subscriber to Defendant’s online DVD-rental service. Class Representative alleged that in the sale and marketing of its DVD-rental service, Defendant falsely and misleadingly promised that he and other subscribers would receive “unlimited” DVD rentals for a flat monthly fee and that DVDs would be transmitted to him via “one-day delivery.” Class Representative further alleged that Defendant did not perform in accordance with those promises. Class Representative claimed that through its actions, Defendant had breached its contract with him and other subscribers; had engaged in fraud, deceit and misrepresentation; had committed false advertising and unfair trade practices in violation of California Business and Professions Code sections 17500, et seq. and 17200, et seq.; and had violated the California Legal Remedies Act. Class Representative sought restitution, damages, punitive damages, and injunctive relief.

Exsqueeze me? That's what I said! I had to do some interwebs scouting to understand what the fork this lawsuit was about. Luckily answers abounded--pretty much every website that was not a Netflix page described a practice called "throttling," in which Netflix intentionally delayed shipping to higher volume users and expedited shipping for customers renting fewer discs each month, calling into question their claim of "unlimited" movies each month, hence breach of contract, false advertising, fraud etc. This being a settlement, Netflix is not admitting any liability but duh.

I don't believe that I've ever experienced this, but who can say. I always chalk delays up to some disgruntled postal carrier but maybe I really was being throttled because when I'm in the throes of a great series I churn that shit out. If only I could channel that single-minded determination into other areas of my life. Now that I think about it, how did they know this was a corporate practice? There must be a leaked memo somewhere ... or a whistleblower. I foresee an inspiring movie with an outraged Julia Roberts playing Frank Chavez.

Later in the email, Netflix links you to what you think will be an explanation of the changes of the terms of use. When you click that link, you end up here. Got it? Uh ... yeah.

The settlement is around $4 million, with Netflix to pay an additional two and half million for the class's legal fees. Sort of takes the shine off my free month.

1 comment:

Anonymous said...

I heard about this a while ago from a friend who is an avid japanese anime fan and who would go through many dvds a week. She noticed that her shipments got slow when she was watching and retuning many in a week. Since I'm the kind of netflixer that can have a dvd sitting in my livingroom for a month (except when Weeds is released, of course), I wasn't part of the lawsuit...

the mama.