Appeals Court Sides With Sony In Battle Over Data Retention

Siding with Sony, a federal appellate court ruled on Friday that the company won't have to face a lawsuit for allegedly violating a video privacy law by failing to shed records about users' movie-watching history.

The unanimous decision, issued by a three-judge panel of the 9th Circuit Court of Appeals, stems from a 2011 lawsuit by Sony PlayStation user Daniel Rodriguez. He contended in a potential class-action that Sony Computer Entertainment ran afoul of the Video Privacy Protection Act by retaining data for more than one year about the videos consumers streamed.

The Video Privacy Protection Act prohibits video rental companies from disclosing personally identifiable information about users' video-watching history without their explicit permission. It also requires companies to discard data within one year of the time it's no longer needed. 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.

The 9th Circuit ruled on Friday that consumers can only bring video privacy lawsuits against companies that allegedly violate the law by divulging information, as opposed to failing to destroy records.

"The Act does not provide a private right of action for the retention of a consumer’s personal information beyond the time limitations," the panel wrote. The decision upholds U.S. District Court Judge Phyllis Hamilton's 2012 decision dismissing the lawsuit.

The action is just one of numerous recent lawsuits involving the video privacy law. Facebook, Netflix and Google are among the biggest companies to face litigation for allegedly violating the law.

In 2013, Netflix agreed to pay $9 million to settle a lawsuit accusing it of wrongly retaining consumers' data. The settlement requires Netflix to pay $6.5 million to a total of 20 nonprofits, and up to $2.25 million to the lawyers who sued the company.

Netflix also said it would stop linking former subscribers' names with their movie-viewing history.

In many other video privacy lawsuits, the courtroom battles have centered on the meaning of "personally identifiable information," and whether the concept includes data like device identifiers -- which are unique, but can't be tied to a consumer's name without more information.

Trial judges recently ruled in favor of Dow Jones and The Cartoon Network on that question. In all of those cases, trial judges said that companies didn't violate the law by pairing the titles of videos watched with users' device IDs (like the 64-digit Android ID) and transmitting the data to analytics companies or other third parties. The consumers have appealed those rulings to the 11th Circuit Court of Appeals, which is still considering the matter.

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