Is it possible that Netflix’s climb to the top of the streaming heap included some underhanded dealings? That’s what a new lawsuit against the service and co-defendant Meta alleges. An antitrust suit seeking class-action status filed in the U.S. District Court for the Northern District of Illinois by two residents of that state says that Meta and Netflix unlawfully colluded to hobble the Facebook Watch streaming service, to the detriment of consumers.

Key Details:

• The suit alleges Meta agreed to shut down Facebook Watch to cede the streaming marketplace to Netflix.
• In return for this pledge, Netflix agreed to funnel subscriber data to Meta to help it boost its ad business.
• Netflix’s advertising spend on Netflix jumped considerably after the alleged bargain was struck.

The lawsuit filed against Meta and Netflix says the two sides engaged in an anticompetitive conspiracy back when Meta was known as Facebook. Shortly after the company decided to establish Facebook Watch to try to compete with Netflix, the two companies entered into an agreement that would eventually lead to the end of the nascent service.

The suit alleges that Facebook CEO Mark Zuckerberg and board of directors member Reed Hastings — who was also Netflix’s CEO at the time — agreed to strip funding from Facebook Watch, in exchange for key Netflix subscriber data that would help Facebook continue to build its targeted advertising algorithms.

According to the suit, this allowed Netflix to exercise undue influence over the streaming marketplace, lowering competition and leading directly to the streamer’s first-ever price increase. The lawsuit seeks to cover all Netflix subscribers who were members as of Aug. 7, 2017.

Facebook Watch was first established in 2017, but in 2018 Zuckerberg cut nearly $1 billion from its budget. By 2020, the service announced that it was cutting most of its original programming, and two years later the service was disappearing from smart TV operating systems.

In addition to data about its subscribers, Netflix also sent more advertising dollars to Facebook. According to the suit, Netflix paid Facebook around $40 million per year to advertise its streaming shows on the social media platform. After the alleged agreement to slow down Facebook Watch, that number increased to $150 million per year or more.

“This model was precisely the kind of targeting that Facebook would have needed to do in order to promote its own Watch product, but instead it was undertaking the effort to promote Netflix’s streaming product in exchange for user data to supercharge and train its advertising systems,” the plaintiffs say.

Sign Up

netflix.com

Netflix

Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”

…

The platform constantly updates its catalog, introducing fresh content alongside timeless classics and international hits. Netflix’s commitment to storytelling has also earned critical acclaim, with award-winning exclusives such as “Roma,” “Marriage Story,” “The Power of the Dog,” “Mank,” and “Ma Rainey’s Black Bottom.” In 2023, their animated film “Guillermo del Toro’s Pinocchio” won an Academy Award for Best Animated Feature, further solidifying Netflix’s reputation for high-quality content.

Recently, Netflix has expanded beyond standard movies and TV titles with the addition of video podcasts, and is also exploring a digital store that would offer third-party streamers within the app.

Netflix offers three plans – stream on 2 devices in HD with the “Standard with Ads” ($8.99) plan, on 2 devices in HD with the “Standard” ($19.99) plan, and 4 devices in up to 4K on the “Premium” ($26.99) plan.

Sign Up

$8.99+ / month

netflix.com