A New Netflix Settlement
A proposed class-action settlement involving Netflix customers has been rewritten to address complaints that the agreement did little for consumers while rewarding the company and lawyers who filed the suit.
The new version of the settlement, which is scheduled to be reviewed by a California Superior Court judge at a hearing today, still gives the plaintiff's' attorneys more than $2 million. However the chief complaint about the previous settlement -- that it would have resulted in Netflix customers paying higher monthy fees -- has been resolved.
Under the previous proposed settlement, subscribers of the DVD-by-mail services would have received a one-month upgrade entitling them to additional DVDs, a value that ranges form $2 to $6, depending on the plan a customer had. Consumers would have continued to be billed for the more-expensive service after the upgrade unless they specifically requested a return to the less expensive plan. The revised agreement still gives customers a one-month free upgrade, but it ends automatic renewal of the more expensive service.
With the elimination of the automatic renewal, "there is no risk that customers will be unwittingly duped into higher membership charges," said Richard Frankel, an attorney for the trial lawyers group.
Once the settlement is approved by the court, Netflix will contact its customers, even those who may have signed on to the earlier agreement, to give them the choice of staying on the upgraded service after the free one-month expires. If they do nothing, their service will return to the less expensive level.
Read more in my story in today's paper. And for more details on the settlement, check the agreement's Web site.
March 22, 2006; 11:09 AM ET
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