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Netflix Accused Of Violating Rental Privacy Law

March 30, 2011 by  

Netflix accused of violating rental privacy lawPopular DVD rental service Netflix has been accused of violating a Federal law that prohibits retailers from disclosing rental and sales records.

According to media reports, former Netflix subscriber Michael Sevy filed a lawsuit on March 18, alleging that the company is retaining sales records of customers who have canceled their memberships. He claims that Netflix is in violation of the Video Privacy Protection Act, which was approved in 1988 after former Supreme Court nominee Robert Bork's video rental history was leaked to the press.

CNET.com recently reported that four similar lawsuits have been filed against Netflix in the last two months.

In response to the legal allegations, the company has canceled a contest that aimed to improve its movie recommendation services, according to The Associated Press. It was a follow-up to a previous challenge that encouraged users to come up with their own recommendation system by using real customer data.

Although no names were provided, critics of Netflix claim that enough information was disclosed to identify subscribers, the media outlet reported.

According to The Hill, the video rental company has built a lobbying presence on Capitol Hill in recent months. Along with other consumer groups, including Free Press, Public Knowledge and Consumers Union, Netflix is fighting legislation that supports overage fees on Internet users who access high volumes of data.

The company, which also offers online video streaming, is concerned that these regulations could hinder business growth. 

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