Netflix settles lawsuit with former customers

Netflix revealed a little bit of bad news late on Friday. In a filing with the US Securities and Exchange Commission, the streaming video company announced that it would be making a change in its previously announced fourth quarter 2012 financial results. Netflix said it would be taking an additional $9 million change due to a settlement that Netflix made "related to our compliance with the Video Privacy Protection Act."

Paidcontent.org reports that the settlement is due to a lawsuit filed in 2011 filed by a number of former customers. Those subscribers stated that when they decided to rejoin Netflix, they discovered that Netflix continued to store their personal information even after they left the service. According to the Video Privacy Protection Act, companies that rent videos must destroy personal information within a year after the subscriber leaves the service.

In an official statement, Netflix said they decided to settle the lawsuit "with no admission of wrongdoing." It added that the lawsuit was unrelated to Netflix's current issue with the Video Privacy Protection Act which currently prevents Netflix from letting its customers share their Netflix viewing habits with their Facebook friends. Netflix does have this feature in a number of other countries and is trying to get the VPPA changed in the US Congress to allow its US customers to access the same feature.

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6 Comments

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I think it crazy that people can get money for this sort of thing.

If anything Netflix should be fined for not following a law. People should only be able to make money (civil suites)... including lawyers if there are damages caused because the law was not followed. I understand why Netflix would settle... because the PR issue itself could cause more harm to their business than 9 million against the bigger picture.

i know some people care.. but in the end... why do you care if they keep it on file longer then a year? I know i don't mind since i can;t see it effecting anything.

"According to the Video Privacy Protection Act, companies that rent videos must destroy personal information within a year after the subscriber leaves the service."

I wish that rule would extend to all companies/services everywhere.