Oh no, not Netflix

Via The Writing on the Wal, Lawyer alleges price fix in Wal-Mart-Netflix deal:

Lawyer Daniel Becnel of Reserve, La., complained in a lawsuit filed Monday in Baton Rouge that Wal-Mart and Netflix improperly negotiated Wal-Mart’s departure from the online video market that previously had only two major competitors, Netflix and Blockbuster.

According to Becnel, Wal-Mart’s presence drove down prices and Netflix suffered reduced profits. Wal-Mart would have suffered, too, if Netflix began selling DVDs, so the companies entered an improper agreement, Becnel says in the lawsuit, which alleges antitrust violations.

When Wal-Mart quit the online DVD rental business, it converted its customers’ accounts to Netflix accounts. Netflix then began promoting Wal-Mart and Walmart.com as places to buy DVDs.

I love my Netflix account and will no doubt keep it. It gives me access, out here in the country, to movies I would not otherwise find in local venues. As Jeff points out, the local library has an excellent selection of films on DVD, and we do make use of our library, but they don’t have the selection available from Netflix. For the most part, I don’t buy DVDs.

This story seems typical of the entrepreneurs of technology — Netflix, Google. They start out going after the giants with their slingshots and then one day they’ve become one of the giants.

I’ve put a new link to The Writing on the Wal on my sidebar. It’s a muckraking blog that does good work.

By the way, Wal-Mart wants your medical records.