• by Wendy Davis  @wendyndavis, July 7, 2016

Music service Pandora didn't violate a Michigan privacy law by allegedly disclosing information about users of its free service to Facebook, the state's highest court said this week.

The Michigan Court of Appeals said in a unanimous decision issued Wednesday that the state Video Privacy Protection Act doesn't apply when companies stream music to users for free. That law prohibits companies that rent, lend or sell music (as well as books and videos) from disclosing customers' identities without their consent.

The ruling stems from a longstanding lawsuit brought against Pandora by Michigan resident Peter Deacon, who alleged in a potential class-action that the service wrongly disclosed his music-listening history to all of his Facebook contacts that also used Pandora. The allegations date to 2010, when Pandora partnered with Facebook for the first version of its "instant personalization" program. In its original form, instant personalization automatically shared logged-in Facebook users' names and photos with outside companies. People could opt out, but at launch the feature operated by default.

U.S. District Court Judge Saundra Brown Armstrong in Oakland, California dismissed Deacon's lawsuit, ruling that Michigan's law -- which is more than 20 years old -- doesn't apply when companies stream tracks. She said the law only applies to companies that lend, rent or sell material.

Deacon appealed to the 9th Circuit Court of Appeals; that judges on that court then asked Michigan's highest court to rule on whether Deacon can proceed against Pandora under the state's privacy law.

The Michigan Supreme Court said this week that Deacon didn't show that he either "rented" or "borrowed" the music streams he accessed through Pandora.

"For a listener to constitute a person who 'rents' a sound recording, he or she must, at a minimum, provide a payment in exchange for that recording," Judge Stephen Markman wrote for the court.

Markman added that Deacon didn't allege that he paid Pandora for a premium membership. But the opinion notes that even if Deacon had done so, he still wouldn't necessarily be considered a "renter."

The Michigan Supreme Court also said that Deacon didn't "borrow" the streams, because he never "returned" them to the service. "Put simply, the music-streaming program offered by defendant only involved the delivery of a sound recording to the listener; there was no corresponding 'return' of a recording or its equivalent from the listener to defendant."