Netflix successfully secured the dismissal of a shareholder lawsuit that accused the company of downplaying the impact of account sharing on subscriber growth. The proposed class action originated after Netflix reported a subscriber decline in April 2022.
The lawsuit alleged that Netflix had misled investors regarding the effects of password sharing on its membership figures. The court's decision to dismiss the case is a favorable outcome for the company, alleviating a potential legal and financial burden.
This resolution removes uncertainty surrounding past subscriber growth forecasts and reinforces Netflix's position against claims of misrepresentation. The company had attributed the 2022 decline to various factors, including account sharing, increased competition, and the cessation of service in Russia.
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