August 16, 2012
Judge Rules Against Hulu In Motion To Dismiss Privacy Suit
redOrbit Staff & Wire Reports - Your Universe Online
A federal court in Northern California ruled on Friday that a 1988 law known as the Video Privacy Protection Act (VPPA), which was enacted during the time of movie rental stores such as Blockbuster, also applies to companies that stream video on the Web.
The ruling, first reported by the New York Times, came about as a result of a lawsuit alleging that online video content provider Hulu had violated the VPPA when it shared the viewing history of its users with companies that could offer them customized advertisements.
Although the VPAA is rarely cited these days, it was designed to safeguard consumer rental records by prohibiting "video tape service providers" from disclosing information about what its customers bought or rented. That ban also extends to online video streaming, Judge Beeler said when she denied Hulu´s motion to have the lawsuit dismissed.
Although the VPAA was originally targeted at in-store rentals, the law did not preclude "new technologies for prerecorded content," including those used by Hulu, from being covered.
The judge has not yet ruled on the merits of the lawsuit, but Friday´s ruling means the case will move forward to the discovery of evidence and arguments, in which the plaintiffs will attempt to prove that Hulu violated their privacy by allowing third-party firms to track their movements on the Internet without their consent.
To accomplish this, Hulu allowed analytics company KISSmetrics to place a “cookie” on users´ computers that included names, location preferences and programs watched. That data was then conveyed to other companies, from advertising networks to analytics companies to Facebook.
“As to Facebook, Hulu included their Facebook IDs, connecting the video content information to Facebook´s personally identifiable user registration information,” Judge Beeler wrote in her ruling.
Hulu has since discontinued using KISSmetrics following two separate studies last year reporting on the practice.
Advertising is Hulu´s primary source of revenue from its videos. The company also offers a premium service at $8 per month, although that service, known as “Hulu Plus,” also includes advertisements.
While the current case involves only Hulu, the final ruling will likely impact other video streaming services as well. Netflix, for instance, wants to partner with Facebook to allow users to share which movies they watch with their friends. Both companies have acknowledged that the VPAA presents a challenge, and are lobbying to overturn the law.