Netflix, Wal-Mart face lawsuits on video market

Netflix and Wal-Mart are facing numerous lawsuits accusing both companies of conspiracy after Netflix reportedly negotiated with Wal-Mart to hasten the company’s exit from the online video market four years ago.

"There’s a giant investigation by a number of law firms throughout the country regarding anti-trust collusive behavior between these two companies," said Daniel Becnel, a lawyer who filed a lawsuit in Baton Rouge, Louisiana. 

There reportedly have been more than 40 lawsuits filed against the two companies related to the alleged improper negotiations.

Netflix has remained silent on the topic, but Wal-Mart issued the following statement:

"We made our own independent decision to exit the DVD rental business and our subsequent agreement with Netflix is entirely proper," Wal-Mart spokesperson Michell Bradford said in a public statement.  "We intend to defend vigorously our decisions regarding the products and services offered to our customers."

Netflix is the proverbial king in movie rentals and is gaining more popularity with online streaming services through the PC and Microsoft Xbox 360 game console.  Despite a lagging global economy that has caused many companies to struggle, Netflix’s fourth-quarter profits jumped 45 percent in part due to its Internet streaming service.

Although Blockbuster and several other companies have popped up to compete in online movie viewing, Netflix is still the leader of the market, and obviously benefited after Wal-Mart’s departure.

It’s still unknown if these lawsuits will hold water, so expect to hear a bit more about these issues in the coming weeks.

This is a thorn in Netflix’s side after the company announced it posted a 45 percent profit last quarter, will process movies over the weekend, and now has more than 1 million activations through Microsofts’ Xbox Live service.