• by Wendy Davis  @wendyndavis, August 13, 2012

In a blow to Hulu, a federal judge has ruled that the federal Video Privacy Protection Act applies to companies that stream video on the Web.

U.S. Magistrate Court Judge Laurel Beeler in the Northern District of California ruled that the 24-year-old law was aimed at protecting the privacy of people who watch video -- regardless of technical format. The decision, issued Friday, denied Hulu's motion to dismiss the lawsuit at an early stage.

The decision was issued in a potential class-action lawsuit alleging that Hulu violated the federal video privacy law by sharing data about users' video-watching history with ad networks, as well as companies engaged in analytics and market research. The VPPA prohibits providers of video tapes or "similar audiovisual material" from disclosing information about consumers' movie-viewing history without their written permission. Hulu argued that streaming media wasn't covered by that language.

But Beeler ruled that lawmakers used the phrase "similar audiovisual material" in order to guarantee that the law's "protections would retain their force even as technologies evolve."

The decision marks the first time that a court has explicitly ruled that streaming video services are covered by the 1988 privacy law, says University of Minnesota law professor William McGeveran.

"The technology is still new enough that it hadn't been tested in court yet," McGeveran says.

He adds that he agrees with Beeler that the law was meant to apply broadly. "Congress was really clear about wanting the interpretation to be technology neutral," he says.

Lawmakers passed the federal statute in 1988, after a newspaper in Washington obtained and published the video rental records of Supreme Court nominee Robert Bork.

Hulu also argued that -- even if it was covered by the VPPA -- the law allows for disclosures made in the ordinary course of business.

But Beeler ruled that "market research and Web analytics are not in the ordinary course of Hulu’s business of delivering video content to consumers."

At the same time, the judge left open the possibility that Hulu could prevail in its legal argument at a later stage of the case. "Whatever the merits are to Hulu’s contentions that it uses the challenged services to deliver targeted advertisements to its users, Plaintiffs alleged unauthorized tracking of Plaintiffs’ data (including video content information). The court cannot resolve this factual issue in a motion to dismiss," Beeler wrote.

The litigation against Hulu dates to last summer, when the company was accused of using ETag technology to track people -- even users who deleted their cookies. ETags store information in users' browser caches, so that when users delete their cookies, the information contained in them can be recreated.

Hulu was among the companies that worked with KISSmetrics; dozens of others also face litigation stemming from their deals with the analytics company.

The lawsuit against Hulu originally alleged that it violated a variety of laws. But earlier this year, Beeler dismissed all of the consumers' claims except for the allegation that Hulu violated the video privacy law. The judge delayed issuing a decision regarding that count until Friday.