Netflix has made a number of changes and missteps in the last year or so. Now it has made another, whether intentional or not, that will cost the entertainment provider to the tune of $9 million.
Netflix, the video-steaming, DVD-mailing giant, has been ordered to pay up in a class-action lawsuit that took the company to task for holding onto the personal video history and queue data of cancelled subscribers for longer than is allowed under the Video Privacy Protection Act.
An inharmonious split
Netflix began only a few years back as a mail DVD rental service. However, last year, when its video-streaming service — originally offered as a kind of extra benefit of the subscription — began to outshine the DVD mail service, the company decided to split into two entities. That was a resounding flop with the subscribers, who felt cheated that they had to pay two different services to get what they once got as a package.
Eventually, after much criticism, the two services reunited with raised fees and reduced streaming content, leaving many subscribers fuming.
Hoarding your preferences
Netflix currently has about 26 million subscribers globally. It keeps files on every one of them, logging streaming choices and video preferences. If you ever cancel a subscription, you can expect that at least every six months the company will contact you with free trials and offers to get you to renew. And if one does renew, no doubt it is a big help that the company already has your preferences when it makes recommendations of programs you might enjoy.
Still, more will probably balk that the trail they left with a company they were disgruntled with is being held onto for whatever purpose.
Deleted within a year
Under the conditions of the class-action lawsuit, the company is now required to eliminate former users’ video history and queue data within one year of cancelling a subscription.
The Video Privacy Protection Act
The Video Privacy Protection Act (VPPA) states that it is illegal for video rental services to divulge the viewing preferences of any customer without written consent. Congress passed it in 1988 specifically because a news agency publically released Supreme Court nominee Robert Bork’s movie rental history. While most of Bork’s rentals were family-friendly, it did contain a few off-color titles.
Netflix has previously taken umbrage with the VPPA. It was quick to point out that it is settling the current case without admitting guilt or reversing its stand. Steve Swasey, Netflix VP of Corporate Communications, said:
“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.”