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Netflix Users Object to Privacy Settlement

29 Aug, 2012 By: Erik Gruenwedel

A number of Netflix subscribers have filed objections to a court decision on a privacy act, complaining the proposed $9 million class-action settlement leaves little for those allegedly wronged.

A Northern California court in February found the Los Gatos, Calif.-based streaming pioneer violated provisions of the 1988 Video Privacy Protection Act that disallows video rental services from accessing subscriber information up to two years after cancellation.

About 50 subscribers reportedly have filed formal objections to the court complaining the settlement awards more than $2 million to lawyers involved in the case, about $30,000 to each of the initial six plaintiffs, and little to anyone else. The complaints say the lack of financial remuneration undermines the validity of the case and renders it little more than a frivolous lawsuit benefiting lawyers.

“The very small amount designated in litigation for the settlement class, perhaps one-tenth of one cent, seems to substantiate the alleged injury, if indeed there was injury to the settlement class, was, in fact, negligible,” according to an Aug. 5 complaint filed by Netflix subscriber Clyde Rothman — first reported by Gigaom.com.

Meanwhile, comments posted online about the settlement include those decrying class-action suits as nothing more than wasteful legal exercises enriching lawyers. They claim Netflix subscriber rental history is nearly impossible for third parties to access.

Indeed, the court mandated the $9 million settlement be made available to nonprofit organizations, institutions, or programs that educate users, regulators and enterprises regarding issues relating to protection of consumer privacy, identity and personal information through user control, pay notice and settlement administration expenses.

The law firms of Edelson McGuire LLC and Wilson Sonsini Goodrich & Rosati PC filed the case in 2011.


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