Netflix Settles Class-Action Video Privacy Lawsuit for $9 Million

Subscriber sued video rental firm over its tracking of users' viewing habits

By Todd Spangler -- Broadcasting & Cable, 2/10/2012 6:30:52 PM

Netflix paid $9 million to settle a class-action lawsuit that accused the video-subscription company of violating the federal Video Privacy Protection Act, it disclosed in a regulatory filing Friday.

Netflix, in an 8-K filing with the Securities and Exchange Commission, said it engaged in mediation of the lawsuit, filed in the U.S. District Court for the Northern District of California. The settlement is subject to court approval.

Netflix did not disclose the terms of the settlement.

"Netflix has settled a lawsuit related to the company's compliance with the Video Privacy Protection Act with no admission of wrongdoing," company spokesman Steve Swasey said in an emailed statement. "This matter is unrelated to the company's concerns about the ambiguities contained in the VPPA, which keep Netflix from offering its U.S. members the ability to share their instant watching information with their Facebook friends, an experience Netflix members currently enjoy in 46 other countries."

In January 2011, Virginia resident Jeff Milans sued Netflix, alleging that the company of "unlawful retention of his personally identifiable information ("PII") and video programming viewing history after cancellation of his membership." That violated the federal Video Privacy Protection Act as well as California's Customer Records Act and Unfair Competition Law, according to the complaint.

The suit was seeking an injunction to stop Netflix's current practices and statutory and punitive monetary damages.