Netflix Sued for Breach of Privacy

21 Dec, 2009 By: Erik Gruenwedel

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Netflix Inc. has been sued in a class-action lawsuit that alleges the Los Gatos, Calif.-based online DVD rental pioneer violated customer privacy laws when it disclosed personal subscriber information as part of a $1 million contest recently to improve its movie rental recommendation system.

The suit, filed Dec. 17 in U.S. District Court in San Jose by subscribers in California, Texas and Ohio, alleges that Netflix perpetuated the “largest voluntary” breach by disclosing sensitive and personal identifying information, including data one “Jane Doe” plaintiff alleged could out her sexual orientation.

The suit seeks damages of $2,500 for each aggrieved plaintiff, which, according to the suit, could include 2 million subscribers.

Specifically, the complaint says issues arose Oct. 2, 2006, when Netflix gave contestants in the global contest aimed at improving customer movie recommendations by 10% access to so-called “training data” that included 100 million movie ratings submitted by 480,000 subscribers from October 1998 to December 2005.

Netflix awarded the $1 million prize to a team of scientists this past summer.

The suit said the data included numeric identifying information unique to individual subscribers. The complaint cited a similar experience by AOL, which ceased releasing search keyword data after reporters were able to identify specific individuals.

“The right to privacy does not appear to be significant to Netflix,” the suit said.

Netflix spokesperson Steve Swasey said the service does not comment on litigation, adding that it has grown 28% year-over-year through the third quarter and continues to be top-rated for customer service.

“We certainly protect our members’ personal information,” Swasey said.

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