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Verizon and Netflix spat heating up

| Jun 11, 2014 | Business Litigation |

Many Michigan residents connect to the Internet using the Verizon FiOS network and enjoy movies and television shows from the online streaming service Netflix. However a dispute between the two companies may put such an arrangement in jeopardy, and a June 5 cease and desist letter sent by Verizon to Netflix on June 5 could be a sign of imminent business litigation.

The letter is a response to a notice that Netflix is displaying to its streaming customers that are having technical issues while connecting to their service through Verizon. The notice implies that problems are the result of the Verizon network not being up to the task of delivering high definition video without frequent pauses and buffering. The problem came to a head when an image of the notice attracted media attention after being posted on social media websites. Verizon claims that the notice is an inflammatory public relations stunt.

A Verizon attorney said that a number of factors could cause video playback quality to suffer. He also pointed out that Netflix delivers its content through third parties that may be at least partially to blame for the poor performance. The lawyer said that Netflix could improve the quality of their service by choosing business partners that did not have known bandwidth congestion issues.

Large businesses often point fingers at one another, but the line separating effective marketing and defamation is often a fine one. Verizon may simply be trying to draw attention to its side of the story, or it may be serious about taking legal action. Litigation is sometimes necessary to protect the standing of a brand, and a business law attorney may be required when the claims of another company jeopardize a reputation that has been built through hard work.

Source: CNET News, “Verizon threatens to sue Netflix over congestion claims“, Marguerite Reardon, June 05, 2014

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