Netflix-Backed Law Meets Opposition At Senate Hearing

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The chairman of the Senate Judiciary Committee expressed concern on Tuesday about a Netflix-backed proposal to amend a federal video privacy law by making it easier to share information on Facebook about people's movie rentals.

The proposed revision to the Video Privacy Protection Act “doesn't seem like the best course for consumers,” Sen. Patrick Leahy (D-Vt.) said at a panel hearing on Tuesday.

The amendment would allow companies like Netflix to secure users' consent to share information about movie rentals on an ongoing basis.

Leahy, who authored the VPPA, expressed concern that this change would blindside users. “When dominant corporate interests entice a check off in order to receive what may seem like a fun new app or service, they may not be presenting a realistic and informed choice to consumers,” he said.

Netflix is pushing for the revision in order to integrate with Facebook. Netflix general counsel David Hyman told lawmakers that ambiguities in the VPPA are preventing the company from offering streams directly through Facebook. “The friction that this ambiguity creates places a drag on social video innovation that is not present in any other medium, including music, books, and even news articles,” he said.

Currently, the federal Video Privacy Protection Act requires movie rental companies to obtain users' consent -- apparently on a movie-by-movie basis -- before sharing data about the movies users watch. The House recently voted in favor of such an amendment.

Rep. Mel Watt (D-N.C.), who opposes the amendment, said at the hearing that the revision will have “ unintended negative consequences for consumers as well as affected businesses that will undoubtedly lose the confidence of their subscribers with the first privacy violation or data breach.”

"Consumer desire to have access to the next cool tool should not be mistaken for the voluntary surrender of fundamental privacy interests," he added.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, agreed that the amendment was problematic. He said in his prepared testimony that “ acquiescing to a one-time blanket consent to cover future video choices is not meaningful consent.”

Not everyone believes that a change in law is necessary for a Netflix-Facebook integration. University of Minnesota law professor Bill McGeveran testified on Tuesday that Netflix could simply offer Facebook users a “play and share” button. If users click on that button, the company could then spread information about users' movie selections to their friends.

But Chris Wolf, a privacy lawyer with Hogan Lovells and co-chair of the think tank Future of Privacy Forum, said that users who want to share their movies through Facebook would find it annoying to have to opt in repeatedly.

Congress enacted the VPPA after a Washington newspaper obtained the video rental records of Robert Bork, who was nominated to serve on the U.S. Supreme Court. The statute allows consumers to sue for up to $2,500 per violation. 

Both Facebook and Netflix have been sued for allegedly violating the VPPA. The case against Facebook stemmed from the 2007 Beacon program, which told users about their friends' activity on outside sites, including Blockbuster.com.

Facebook agreed to resolve that case by contributing $6 million toward a new privacy foundation -- which it will partially control. Facebook hasn't yet launched the foundation because an appellate court is still reviewing the settlement.

Netflix additionally faces class-action litigation for retaining data about users' movie rental history and recommendations.

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