Legal News

As discussed in a prior post, in December of last year, the online movie company Netflix was sued for release of private information about its customers in preparation for its second Netflix Prize contest. That contest, to see who in the known universe could write an algorithm that would better predict Netflix users' movie choices, allegedly involved the release of supposedly "anonymous" information about customers, their backgrounds and their movie rentals. Only it wasn't anonymous enough, because the online brains with access to the information promptly figured out how to match names and movies before anyone even had a chance to consider the prize program.

Not surprisingly, the release of what some believed to be private information into the ether cased a lawsuit and inquiry by the FTC. The lead plaintiff in the private lawsuit was a closeted gay woman living in a very conservative area who feared the release of her movie viewing preferences could lead to her being outed, thus affecting her child and her ability to earn a living. Movie rental choices are actually protected as private information under the anachronistically named, but still relevant, Video Privacy Protection Act.

On March 13, ars technica reported that Netflix had settled the private lawsuit and entered into an agreement regarding the use of customer information with the FTC. According to a post on a company blog Neil Hunt, Chief Product Officer for Netflix, wrote the settlement with the plaintiffs and the agreement with the FTC "involves certain parameters for how we use Netflix data in any future research programs." As part of the agreement, the company has cancelled the second round of the Netflix Prize contest.

If Netflix truly seeks to be responsive to its customers, they might want to look at their own suggestions on how to resolve the conflict between privacy and darn good movie rentals. Some of the comments posted in response to Hunt's blog suggested that various individuals would voluntarily opt in to a contest and provide their information as fodder for programmers to use in coming up with the next big idea in Netflix programs. That seems a much better option than the initial one of the company choosing for customers whose information would or would not be released.

Related Resources:

• Netflix settles privacy lawsuit, ditches $1 million contest (ars technica)
• Video Privacy Protection Act (Electronic Privacy Information Center)
• Netflix Sued for "Borking" Consumers (FindLaw's Common Law)