Netflix sues Yahoo executive over alleged kickbacks

November 26, 2014, 2:14 PM UTC
Photograph by Bloomberg/Getty Images

Netflix has filed a lawsuit against a former vice president, alleging the executive who now works at Yahoo received kickbacks from vendors when he was employed at the streaming-video company.

According to the complaint, which was filed in a California Superior Court, Michael Kail was allegedly paid “commissions” for products and services that Netflix paid to those third-party companies. Netflix (NFLX) claims that it discovered these alleged third-party commissions after Kail left Netflix in August of this year.

Kail, who joined Yahoo (YHOO) to become that company’s chief information officer, has worked in information technology operations for more than 23 years. He worked as vice president of IT operations at Netflix, where he was responsible for negotiating and executive contracts when Netflix bought IT-related products.

News of the lawsuit was first reported by Re/code, which reported that Kail could have allegedly collected between $450,000 and $560,000 in kickbacks for contracts Netflix arranged with IT service companies Vistara and NetEnrich. Netflix claims the commissions Kail received ranged between about 12% to 15% of the total invoice amounts paid by the streaming-video company.

Efforts to reach Kail and his legal team weren’t immediately successful. A Yahoo representative declined to comment.