• by Wendy Davis , Staff Writer @wendyndavis, July 31, 2015

Netflix didn't violate a federal video privacy law by displaying information about subscribers' movie-watching history to their friends, families and guests, a federal appellate court said today.

The ruling, issued by a three-judge panel of the 9th Circuit Court of Appeals, upholds an earlier decision by U.S. District Court Judge Edward Davila, who dismissed a potential class-action lawsuit alleging that Netflix violated the Video Privacy Protection Act.

That law prohibits video rental companies from disclosing information about users' video-watching history without their explicit permission. Congress passed the measure in 1988, after a Washington, D.C. newspaper obtained and published the video rental records of Supreme Court nominee Robert Bork.

Today's ruling stems from a lawsuit filed by Michigan resident Meghan Mollett and California resident Tracy Hellwig, who took issue with Netflix's home page. That page displays the names of recently watched videos, as well as the titles in subscribers' queues.

The subscribers alleged that the company violates the video privacy law by automatically displaying this page whenever Netflix users access the company's app -- especially when they're streaming videos to a TV set in their living rooms, where friends and family might also be present.

Mollett and Hellwig suggested in their lawsuit, filed in San Jose, Calif. in 2011, that Netflix should give users more control over the home page that comes up when they access the company's online app. "Netflix could easily protect the personally identifiable information of its subscribers by providing its subscribers with the option to delete, hide, edit or lack any queues that disclose any personal information that the subscriber would like to keep private," they said in their complaint.

For its part, Netflix argued that it merely transmits information to subscribers. The company argued that it has no way to know whether customers allow their home pages to be viewed by other people.

"No matter what the circumstances may be in a given subscriber’s residence at one time or another (something that Netflix has no way of knowing), Netflix’s actions remain the same: it transmits information to devices that its subscribers have voluntarily connected to their Netflix accounts," Netflix argued in its court papers. "An email sent to a person’s email address is sent to that person, even if others have access to his email account or are looking at his screen while he reads it."

The 9th Circuit agreed with Netflix. "Where the subscriber controls which third parties may access her Netflix account and where the “personally identifiable information” is disclosed to only a select group of individuals, both the letter and the spirit of the law are sustained," the judges wrote.

Despite its legal stance, last September Netflix rolled out new controls that enable subscribers to remove movies from their viewing history.