It's a good thing that Lady Justice is wearing a blindfold.
A federal judge has thrown out a class action lawsuit that accuses Netflix of colluding with Wal-Mart
It did seem to play out that way. Wal-Mart handed over its fledgling DVD rentals by mail business to Netflix, while Netflix never did sell new optical discs and even discontinued it practice of selling excess inventory to its subscribers.
However, this deal was laughable from the start. Wal-Mart was flopping in DVD rentals anyway. The discount department store chain was reportedly down to about 100,000 members when it pulled out the white flag, so it was never going to be a threat to Netflix or what is now DISH Network's
Over on the retail front, did anyone really think Netflix would be a major player on the DVD sale front? Blockbuster with its in-store resale business and Amazon.com
Besides, movie studios have been bellyaching about the accessibility of cheap rentals -- either physical in-store rentals through Coinstar's
There was no collusion, at least not to the point of raising antitrust concerns. It was silly, quite frankly, and the only reason that folks began to take this seriously is because Wal-Mart decided to settle on the suit. Rather than deal with lofty legal tabs and dragging its reputation as a global bully through the mud again, the world's largest retailer figured that settling would be the easiest way to make this go away.
Kudos to Netflix for sticking it out, especially since many figured that it was silly for the company to risk hefty damages if it were to come up short here.
If you want to see what happens next, consider adding Netflix to My Watchlist.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story except for Netflix. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.