A northern California district court has recently approved a legal settlement with Netflix worth $9 million. The settlement, which made its first rounds in the news in February, is the outcome of a privacy class action lawsuit claiming that Netflix violated the privacy of its former customers.
The online content streaming service allegedly kept information about unsubscribed customers for longer than the legal duration and shared this information with third parties without any consent from the customers. Former customers caught on to Netflix’s practices when they noticed that their preferences and history from a previous subscription were still there, despite the lengthy period between their un-subscription from and re-subscription to the service.
The streaming customer’s privacy is protected under the Video Privacy Protection Act (VPPA), a law passed in 1988 during the time of VHS. The VPPA came into law because of an incident where the video rental history of a Supreme Court nominee, Robert Bork, was made public without his consent. Even though, the law then only specified VHS technology, present interpretation of it extends the law’s realm into the digital area, which includes streaming services like Netflix.
Despite the $9 million legal settlement, Netflix still claims that it had not violated the VPPA. The content streaming site is currently trying to get the VPPA amended in order to fully integrate its service into Facebook. As of now, the law prevents Netflix from automatically publishing its US customers’ viewing histories on Facebook, since it interprets that act as a disclosure of video rental history. It’s a particularly frustrating situation for Netflix, especially since it doesn’t have to deal with a similar legal conflict in 46 countries where it offers its services.
Until it can get the VPPA amended, Netflix is, in the meantime, trying to get into the good graces of the public. The online service has promised to alter its data retention policy; information about subscribers is now separated from their viewing history if the account is less than a year old.
Furthermore, Netflix’s $9 million settlement will be put into a fund that will give donations to a list of court-approved not-for-profit organizations, institutions, or programs, so long as these programs aim to inform people about consumer privacy, identity, and information.
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