Netflix Pays $9 Million In Privacy Lawsuit Settlement

    February 12, 2012

You know how Netflix keeps your instant queue and personal information after you cancel a subscription in the case that you may sign up again in the future? Yeah, they paid $9 million to settle a lawsuit over that.

Paid Content is reporting that Netflix announced Friday that it will pay to settle claims that they illegally kept user rental histories. The lawsuit arose from accusations that the rental and streaming service had violated the Video Privacy Protection Act and California consumer laws that forbid rental agencies from disclosing customer data. The VPPA also requires rental agencies to destroy certain personal data within one year.

The lawsuit had customers saying they discovered Netflix had kept their rental data after resubscribing for the service. The information is used to predict what the user may want to watch after they come back from a hiatus.

Netflix says it is working with plaintiffs’ lawyers to finalize the $9 million settlement. It will have to be approved by a judge, however, before it can be paid out.

The VPPA was passed in 1988 after a newspaper published the rental history of Supreme Court nominee Robert Bork. Even though the technology has changed, the law still applies to the company’s instant streaming service. In fact, the VPPA is the law that prevents Facebook from implementing the ability for users to share what they watch over Facebook.

Steve Swasey, VP of Corporate Communications for Netflix, provided this statement on the matter:

Netflix has settled a lawsuit related to the company’s compliance with the Video Privacy Protection Act with no admission of wrongdoing. This matter is unrelated to the company’s concerns about the ambiguities contained in the VPPA, which keep Netflix from offering its U.S. members the ability to share their instant watching information with their Facebook friends, an experience Netflix members currently enjoy in 46 other countries.

It sounds like this is going to keep happening unless the U.S. amends the VPPA or gets rid of it altogether.