Netflix and Hulu Faces Class Action Lawsuit Over Failure to Pay States’ Fees
Netflix and Hulu, according to a new class action lawsuit, refused to pay fees mandated by the New Jersey Cable Television Act (CTA).
Borough Of Longport, et al. v. Netflix, Inc., et al.
Borough of Longport and Township of Irvington, the lead plaintiffs, seek to represent other areas of New Jersey that have been deprived of a significant source of revenue that Netflix and Hulu are obliged to pay.
The plaintiffs asserted that the CTA requires Netflix and Hulu to pay municipality franchise fees equal to a percentage of their gross revenue. The CTA regulates and assesses franchise fees to entities that are known to provide subscriptions to video programs or cable services.
According to the class action lawsuit, Netflix is the world’s premier subscription entertainment service, delivering paid streaming subscriptions worldwide for access to television series, documentaries, and feature films in a wide variety of genres and languages.
Hulu is a video-on-demand service that collects bought and original TV and film entertainment content for delivery to internet-enabled devices. In addition to the complaint, Hulu provides a subscription-based service with restricted commercial announcements as well as a subscription-based service with no commercial announcements.
Should Netflix and Hulu Pay?
According to the class action lawsuit, Netflix and Hulu qualify because they offer subscription streaming services that allow customers to watch movies, television series, and other programs that are comparable to what cable television providers offer.
The plaintiffs claim that the CTA requires each company wishing to provide cable service in the state to file individual certificates of approval to the New Jersey Board of Public Utilities before beginning operations. A system-wide franchise or municipalities must approve these certifications.
The CTA is then empowered to impose mandatory fees on accepted entities, with a portion of the proceeds benefiting local governments.
According to the plaintiffs, neither Netflix nor Hulu attempted to get the necessary certificates and are thereby operating their services in New Jersey without authorization and in direct violation of the CTA.
Netflix, as well as Hulu, have previously faced legal action. A 2020 class action complaint alleged that Hulu’s web browser’s performance is purposefully slowed to encourage app downloads.
Netflix was sued in 2016 for failing to fulfill millions of “grandfathered” subscription arrangements with price guarantees.
Editor’s Note on Netflix and Hulu CTA Class Action Lawsuit 2021:
This article is written to inform you of the class action lawsuit against Netflix and Hulu over failure to pay certain mandated fees. You might also be interested in learning how to disable TV from tracking your activities.
Case Name & No.: Borough Of Longport, et al. v. Netflix, Inc. et al., Case No. 2:21-cv-15303-SRC-MAH
Jurisdiction: U.S. District Court for the District of New Jersey
Products/Services: New Jersey CTA fees
Allegations: Netflix and Hulu allegedly failed to pay the New Jersey mandated CTA fees
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