Court Rules Online Video Streaming Is Protected By VPPA

If you have a broadband Internet connection at home, you probably download or stream videos and movies. What you may not know is that several companies are working and lobbying to roll back privacy protections for consumers regarding your video and movie usage.

Fierce Online Video reported (links added):

"A Northern California court has ruled that the Video Privacy Protection Act (VPPA), a 1998 law enacted during the era of movie rental stores, applies to online video service providers as the modern-day extensions of those old brick-and-mortar structures... Hulu, which is owned by News Corp., Comcast's NBCUniversal, Providence Equity Partners and Walt Disney Co. had claimed that VPPA was not relevant because it covered only information about consumers who obtained physical objects from physical stores."

The ruling occurred in the Northern District Court of California (San Francisco). The suit (Garvey et al v KISSmetrics) included Hulu as a co-defendant, and was the consolidation of several class-action lawsuits, one of which was Couch et. al v KISSmetrics et. al (PDF - 6.3 MBytes). The plaintiffs in that complaint were represented by a familiar name: the Law Office of Joseph Malley. The Privacy Cruasader strikes again!

Some news outlets reported that Hulu.com was sued because of the VPPA. That isn't accurate. Hulu.com, and several other companies, were sued becuase they allegedly used "Zombie E-Tags" to track consumers without notice and without consent. This blog reported about that suit back in October, 2011. Hulu.com (and several  defendant companies) attempted to use the VPPA as a defense, which the court rejected.

So, for better (or worse) the actions of these defendant companies have brought attention to the VPPA, which some lawmakers in Congress believe needs to be modified. Later during 2011, Hulu stopped using KISSmetrics to track subscribers' online usage after researchers documented that consumers could not avoid nor opt out of it. Fierce Online Video also reported (links added):

"... other streaming video services are watching intently. Netflix, for instance, wants to create a similar link between its video service and Facebook."

So, it will be very interesting to watch how various online video/movie distribution outlets respond, given the court's rejection of the VPPA as a defense. Earlier this year, Netflix paid $9 million to settle a class-action  lawsuit which alleged that the company illegally retained and shared subscribers' video habits.

Providence Equity Partners is a global private equity firm (similar to Bain & Company) with $23 billion under management. It invests in media, entertainment, and education companies. The Providence, Rhode Island-based firm has offices in Beijing, Hong Kong, London, New Delhi, and New York. Rumors suggest that the firm wants to invest in Electronic Arts, a video game company. In its website, the firm describes itself:

"We partner with companies across different stages in their development, from growth capital and complex recapitalizations of family-owned businesses to large buyouts and take-privates. We can employ a variety of financing structures and target equity investments of $150 million to $800 million. We prefer to lead our investments, serve on company boards, and work collaboratively with company management. From broadband to broadcast, music to film, wireline to wireless, publishing to Internet, we bring unparalleled industry, financial and operational expertise to each of our portfolio companies."

News Corporation owns several newspaper and media companies, including the Wall Street Journal, Fox News, and several British newspapers recently involved in the bribery and mobile phone hacking scandals. The scandals resulted in numerous arrests, several lawsuits, and have cost the company about $224 million. Comcast delivers cable television services throughout most of the United States.

To learn more about the VPPA, visit the EPIC site. Several states have enacted similar legislation to provide consumers with greater protections. You can also read the full text of the VPPA, which is also available here.

Consumer privacy protections will become increasingly more important as video content migrates from older distribution channels to newer ones. Companies would love to profit by selling your movie-viewing habits to marketers and other third-party companies. (And, it's probably easier to profit when there are fewer laws protecting consumers' privacy.) What you watch says a lot about you, your values, your health, and your lifestyle. Fortunately, the judge ruled that when it comes to movies, video is video no matter how it is delivered.

Astute readers noticed that I mentioned the word "lobbying" in the opening paragraph. This blog will discuss that later this week.

Comments

[Darren]

I think its necessary too. Also I would say that don't allow users to upload anything which is not suitable for kids or society. Only good things to be considered online. Because net is the way of becoming aware of many latest things happening in the world.

[Wade]

Frankly speaking i don't about this services. I gather good knowledge and i will definitely search more about it. I am thankful to author for this share..