FTC Says Netflix Settlement Insufficient

Score one for the FTC—and by proxy, consumers—for their statement in the Netflix class action settlement, which as originally proposed offered a one-month upgrade to customers affected. (So if you were on a three-a-month plan, you’d get a four-a-month plan for a single month.) A one-month upgrade that would automatically transition into the higher movies-per-month plan after the free period. Ars Technica reports this quote from the FTC:

In the instant case, the Commission believes that the negative option aspect of the proposed settlement appears dangerously close to being a promotional gimmick. Specifically, the value of the benefit offered each class member is very low, both because those members who accept the benefit receive very little of value and because it is reasonably foreseeable that many class members will forgo any benefit altogether to avoid the negative option.

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  1. I love Netflix, in spite of a few problems I’ve had with them (among them an unusually high number of discs that have gone missing, meaning a delay in new discs being sent).

    But the class action settlement was weak. Who the hell needs four discs at once? Sounds groovy if you’re a shut in. And that you had to change the account back to three discs on your own smelled to me just like those porn sites that get you to sign up for $1 for a month (or free, but ask for your credit card anyway), and then charge you $39.99 a month after… not that I’d know anything about that.

    Anyway, Netflix should have just offered a $5 one time deduction, instead of trying to sham people out of more money.

    Unfortunately, the lawyers on the side of the consumerers signed off on the class action suit, and made some decent cash knowing exactly what was happening. They’re the ones who should be sued.

  2. tomdobb says:

    I’m always amused by the idea that having a spare 6 hours a week to watch movies means you’re a total loser. But having 4 and half hours to sit on your ass is perfectly normal.

    The settlement is a pretty obvious bait and switch though and has just been delayed for 30 days. If I had to guess, I’d say that Netflix would just change the terms of the settlement so the higher level is no longer an auto-renew.

  3. Hey, I encourage sitting on your ass as much as possible…as long as you get up everyonce in a while to go to the mailbox to send back your DVDs.