Hulu Loses Online Privacy Case

Online video service provider, Hulu, has recently lost a legal decision to plaintiffs alleging the streaming content website violated by the Video Privacy Protection Act (VPPA) by sharing user viewing details with third parties.  Hulu would share viewers' history with advertising agencies, market research companies, and social media outlets without permission, and a group of users filed a lawsuit for violation of privacy.

The VPPA prevents “video tape service providers” from disclosing personal information about renters, purchasers, or subscribers of “pre-recorded video cassette tapes or similar audio visual materials” to third parties.  Passed in 1988, the quoted language clearly could not conceive a service like Hulu’s existence, and the company argued in its defense that the law did not apply because online content is not a "pre-recorded video cassette or similar audio visual material."

The judge deciding the case determined that the VPPA does apply to Hulu because the content qualifies as “similar audio visual materials” under the law.  Rejecting the argument that the law only applied to physical materials, the judge determined that the authors of the VPPA intended the law to be forward-looking enough to apply to any and all video content.  This means that regardless of the format in which the content is viewed, the provider cannot share user viewing details with third parties.

The VPPA does allow content providers to share information to third parties “in the ordinary course of business,” and Hulu argued that exception to the law applied here.  Arguing that advertising and market research companies that provided “order fulfillment” and “request processing” functions for Hulu did so in the ordinary course of business.  However, the judge disagreed by saying that market research and customer analytics were not in the ordinary course of the business of delivering online video content to consumers. 

While Hulu may eventually win on the second point and get limited permission to share viewer data under the “ordinary course of business” exception, this case sets important standards for privacy rights to viewers of online content.  Online video providers must follow the Video Privacy Protection Act, and be wary of the information they share with third party companies.  A victory for viewers of online content in another skirmish in the ongoing battle over online privacy rights.

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