U.S. Judge Gives Approval on Netflix Privacy Settlement
U.S. Federal judge has granted preliminary approval to Netflix Inc in a case of breaching consumer privacy laws. The video rental company will pay $9 million as settlement fee because of the lawsuit filed against the company by its consumers.
According to the U.S District Judge Edward Davila in San Jose, California, the agreement that was finalized in February “compares favorably” to other settlement cases filed by consumers against Google Inc and Facebook Inc.
In addition, the judge confirmed that there were millions of current and former Netflix subscribers who were affected by the company’s policy.
These subscribers alleged that the company violates the federal Video Privacy Protection Act of 1988 by maintaining data of DVD and Internet videos they have watched in the last two years, even after they stopped using the service. They also complained that the company keeps a record of credit card information.
The consumers said that the company used their information in marketing and advertising without their permission – a legal requirement which is being violated.
The consumers found it extremely uncomfortable that the company could keep viewing their histories and credit card information for a long time, the complaint said.
The settlement restricts Netflix to “decouple” subscribers’ rental histories from other identification data after an year has passed since the services stopped. Money will also be spent to guide consumers and regulators on privacy protection issues.
The case was filed by former Netflix subscribers and two residents of Virginia Peter Comstock and Jeff Milians.
However, the Los Gatos California-based company did not confess to wrongdoing, and accounted for the settlement in its results for the fourth quarter of 2011.
The final hearing is scheduled for December 5.
The video privacy law was approved in 1987 when the Supreme Court nominee Robert Bork’s video rental history was released in the press during his confirmation proceedings in 1987.
