Thursday, January 14, 2010

Netflix Sued for Alleged Privacy Violations

Part 2 of the “Two New Privacy Lawsuits Filed” Topic

Also on December 17, 2009, (see prior post about Facebook complaint), a Jane Doe plaintiff and three other individual plaintiffs filed a Class Action Complaint in the Northern District of California against Netflix and John Doe defendants 1-50, alleging violations of the Video Privacy Protection Act (18 U.S.C. § 2710), various California consumer protection statutes and common law claims for unjust enrichment and public disclosure of private facts in connection with Netflix’s “Prize” offered to the computer developer who succeeded in creating computer algorithms that improve Netflix’s recommendations tool by the largest margin. Valdez-Marquez et al. v. Netflix, Inc., et al., Case No. C 09-05903 (N.D. Cal.); see also WSJ Law Blog, “Did Netflix Violate Subscribers’ Privacy? Lawsuit Says Yes,” posted Dec. 18, 2009.

As the company’s web site explained, “The Netflix Prize sought to substantially improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences.” Netflix Prize (last visited Jan. 14, 2010). The best algorithm would win the $1 million grand prize, and indeed was awarded on September 21, 2009.

A copy of the complaint can be found on the Wall Street Journal’s site, and an article about the complaint (with a separate link to the complaint) was also published on’s Threat Level Blog: Ryan Singel, “Netflix Spilled Your Brokeback Mountain Secret, Lawsuit Claims,”, Dec. 17, 2009.

Interestingly, a university professor identified a problem with the anonymizing tools Netflix used in 2006 and argued that Netflix should not move forward with its newest contest, “Netflix Prize 2”, which would again release “anonymous” data on which the new algorithms would be based. See Paul Ohm, “Netflix's Impending (But Still Avoidable) Multi-Million Dollar Privacy Blunder,” posted on Freedom to Tinker (hosted by Princeton University's Center for Information Technology Policy) on Sept. 21, 2009.

Professor Ohm’s analysis identifying potential risks of data breach was further discussed in an article on Network World. Ian Paul, “Netflix Prize 2: What You Need to Know,” Network World, Sept. 23, 2009.

Apparently, Netflix has not yet rolled out the data associated with Netflix Prize 2 – at least, according to its web site, the details of the contest would be announced “shortly,” and prizes would be awarded for the “best results at 6 months and 18 months” instead of the 3 years associated with the original contest.

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