Ending Net Neutrality Is a Business Risk, Netflix Says
"Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business," the company said in its newly released annual report.
January 30, 2018 at 05:59 PM
3 minute read
Netflix headquarters. Photo: Jason Doiy/ALM
The end of net neutrality could slow down more than internet speeds, according to Netflix Inc.'s annual report. The 10-K report, released Monday afternoon, lists changes in net neutrality laws as a risk to the media streaming company's business.
“Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business,” the report states.
“Given uncertainty around these rules,” the report said, “including changing interpretations, amendments or repeal, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.”
A Netfilx representative declined to disclose the outside firms that had worked with the company to draft the 10-K report.
The annual report isn't the first time the Los Gatos-based company has publicly defended net neutrality. It's been mentioned in previous reports before the protections were officially repealed.
On Dec. 14, the day the Federal Communications Commission voted 3-2 to remove the Obama-era regulations that prevent internet service providers from favoring or blocking certain sites, Netflix tweeted the decision was ”the beginning of a longer legal battle.” Earlier this year, the company tweeted, “In 2018, the Internet is united in defense of # NetNeutrality. As for the FCC, we will see you in court.”
And Netflix isn't the only company worrying about the end of net neutrality in its annual report. Twitter Inc. listed “laws or practices limiting Internet neutrality” as a business risk in its recently filed 2017 annual report, noting the repeal of such laws could decrease site popularity or increase the company's operating costs.
“If we or our users experience disruptions in Internet service or if Internet service providers are able to block, degrade or charge for access to our products and services, we could incur additional expenses and the loss of users and advertisers,” Twitter's 10-K stated.
Twitter and Netflix haven't laid out company-specific plans to fight the FCC in court, but both are members of the Internet Association. The IA, an internet lobbying group for some of tech's biggest names, told Recode in early January it planned to join a lawsuit against the FCC as an intervening party, but that it wouldn't be filing its own.
But fellow IA member and e-commerce company Etsy Inc. has already announced it plans to separately sue the FCC as an individual company. Etsy also listed the end of net neutrality as a potential risk to business in an earlier annual report released in February 2017.
“In 2015, rules approved by the Federal Communications Commission went into effect that prohibit internet service providers from charging content providers higher rates in order to deliver their content over certain 'fast traffic' lanes; however, the rules are subject to pending legal challenges and if they are overturned, or if the current Federal Communications Commission revokes or changes the rules, our business could be adversely impacted,” the company's 10-K stated.
It's currently unclear whether any other IA companies will follow Etsy and separately sue the FCC and who might represent them in these suits. The Netflix representative said in an email Tuesday that the company will not pursue its own separate legal action.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllPolsinelli Hires Data Privacy, Tech Transactions Partner From Kirkland & Ellis
Many Lawyers Are Reeling From Election Results, but Leaders Are Staying Mum
6 minute readQuantum Computing Company to Part With General Counsel
California-Based Portal Crypto Exchange Faces Delaware Investor Class Action
3 minute readTrending Stories
- 1HSF and Kramer Levin Leaders Set Out Merger Timeline, Structure
- 2'Don't Be Afraid to Dumb It Down': Top Fed Magistrate Judge Gives Tips on Explaining Complex Discovery Disputes
- 3Doctrine of ‘Practical Location,’ Breach of a Commercial Lease: This Week in Scott Mollen’s Realty Law Digest
- 4Supreme Court Asked to Review Issues of Secondary Liability for Copyright Infringement
- 5Defense Verdict: Alston & Bird Beat Back $35M Claim Against Nokia
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250