Netflix announced that it will settle a lawsuit that claimed that it illegally retained customers’ rental histories, an act that ran afoul of Video Privacy Protection Act and California consumer laws. The settlement, which was disclosed in a Netflix securities filing with the SEC, puts to bed a 2011 lawsuit that accused the company of VPAA and California consumer law violations. The VPPA restricts video rental companies from disclosing customer information and requires them to destroy rental history data within one year.
Former customers alleged in the lawsuit that Netflix retained their personal information – a fact they learned when they went to re-subscribe to the service later on. This information they retained include streaming queue and disc-based rental history.
The VPPA has caused Netflix a number of setbacks. Earlier in the year the company wanted to allow users to share rental info with friends on Facebook. The law would not allow that. Congress passed the law in 1988 in the era of home video after a newspaper published the video rental history of Supreme Court nominee Robert Bork. Netflix is urging lawmakers to change the law.
The settlement will cost the company an estimated $9 million. The company will pay the money while not admitting to any wrong-doing.