Netflix Falsely Advertises, Says Class

SANTA ANA, Calif. (CN) - Netflix falsely advertises that members can rent up to "8 DVDs out at a time with most plans allowing unlimited DVD exchanges each month," a class action claims in Superior Court. In fact, the class claims, Netflix "slows down the delivery of DVDs" by using an undisclosed "allocation formula," and it "discloses" these terms of use "in tiny 7-point type at the bottom of the Netflix Web page," without clearly indicating that this is a link to another page, which contains the 11,000-word terms of use, which "materially differ" from what Nerflix advertises.

"The deception continues in the Netflix 'Allocation' plan which states that 'we do not establish a monthly limit on the number of DVDs you can rent' when, in fact, Netflix does limit the number of DVDs a customer can rent," the complaint states.

It continues: "Unsurprisingly, the Netflix allocation system infuriates members, results in many users quitting the Netflix service once they learn of the scheme, and has given rise to numerous consumer complaints, many of which can be found online. An example of such complaints include[s] the following: 'the longer you are a member, the fewer titles you get,' the 'service got slower and slower' and 'Netflix is a total ripoff.' (http://www dealcatcher.com/forums/m_486466/tm.htm).

"Similarly, other consumers have complaint that Netflix uses a 'bait and switch tactic. Suddenly, movie shipments went from twice a week to once a week;' 'if you rent frequently Netflix will penalize you by slowing your shipping times;' 'I suspected that Netflix was cheating me, but I wasn't completely convinced until I read similar experiences,' and 'my Netflix service is terrible ... suddenly movies that used to take one day to arrive now take days to a week to get to my house.'"

The class claims that Netflix continues to make the false advertisements despite settling a 2004 class action that made similar allegations. It seeks damages and an injunction and is represented by David Markham of San Diego.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit