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Netflix settles privacy lawsuit for $9 million
Netflix admitted on Friday it paid $9 million to settle a lawsuit alleging it violated video privacy laws.
In a filing with the Securities and Exchange Commission, the video service acknowledged that earlier this year, it paid $9 million to settle a class-action lawsuit claiming it violated the Video Privacy Protection Act (VPPA).
Netflix is currently lobbying Congress to update the VPAA, a 1988 law that bans sharing of video rental information without written consent by the consumer or a warrant from the police. The law also requires that video rental companies delete the personal information of their customers within a year of collecting it.
'Netflix has failed [to] uphold its duty to protect the privacy rights of its current and former subscribers, and in the course, has violated federal and state laws regarding the destruction of [personally identifiable information]," the lawsuit alleged.
In its filing, Netflix noted that it hadn't anticipated having to pay to settle the charges.
"The Company had previously evaluated this claim and determined it to be immaterial and that a potential loss was not probable," Netflix wrote.
A Netflix spokesman noted the company did not admit wrongdoing by agreeing to the settlement. He also said the case is unrelated to Netflix's lobbying for changes to the VPAA.
"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," he said.
Congress passed the VPAA in 1988 after the Washington City Paper published a list of recent video rentals by Supreme Court nominee Robert Bork during his contentious nomination process. Although his rental history was mostly innocuous, members of Congress were outraged at the breach of privacy.
--Updated at 10:16 p.m.
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