Antitrust Law Daily Wrap Up, PRIVACY—9th Cir.: Netflix did not violate Video Privacy Protection Act, (Aug 3, 2015)

By Greg Hammond, J.D.

Subscription video streaming service Netflix, Inc. did not violate the Video Privacy Protection Act (VPPA) and California privacy law by allegedly disclosing subscriber’s viewing history to family, friends, and guests. The U.S. Court of Appeals in San Francisco affirmed a lower court’s order dismissing the privacy claims, finding that the complained-of disclosures were lawfully made to Netflix’s own subscribers, not third parties (Mollett v. Netflix, Inc., July 31, 2015, Dearie, R.).

Consumers Meghan Mollett and Tracy Hellwig filed suit against Netflix, alleging that the company violated the VPPA and California Civil Code § 1799.3, by permitting certain disclosures about their viewing history to third parties—specifically, subscribers’ family, friends, and guests. The disclosures allegedly were made by posting recommendations, based on previously watched videos, and a “recently watched” list on subscribers’ account home pages. The lists are visible to third parties who use a subscriber’s account to stream videos, or are in the presence of subscribers who access their account through a Netflix-ready device.

The district court dismissed the complaint, finding merit to both of Netflix’s arguments that: (1) its disclosures of personal information are made to subscribers themselves and are therefore permissible; and (2) any disclosures to third parties are not made knowingly, as required by the VPPA. The consumers appealed.

The appellate court agreed that the plaintiffs failed to plead a plausible violation of the VPPA, because the disclosure alleged by the plaintiffs is a disclosure “to the consumer.” Specifically, the court noted that personally identifiable information, by default, is only disclosed to Netflix subscribers through their password-protected accounts. Further, the lawfulness of the disclosure cannot depend on circumstances outside of Netflix’s control, such as subscribers’ choice to display the content on their television screens, or allowing third parties to access their Netflix accounts.

The California claim also was properly dismissed for substantially the same reasons, the court concluded. Specifically, the California Civil Code excludes liability for disclosures to a subscriber who is the subject of a record. Because Netflix’s disclosure of personal information was made to its subscribers, the company was not liable under section 1799.3.

The case number is 12-17045.

Attorneys: Rachele R. Rickert (Wolf Haldenstein Adler Freeman & Herz LLC) for Meghan Mollett and Tracy Hellwig. Keith E. Eggleton (Wilson Sonsini Goodrich & Rosati) for Netflix, Inc.

Companies: Netflix, Inc.

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