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April 18, 2008

Blockbuster Sued Over Video Disclosure to Facebook's Beacon

Blockbuster is being sued over providing Facebook with rental information for Facebook users as part of the Beacon marketing program.  This allegedly violates the Video Tape Rental and Sale Records Act.  Facebook and its partners track sales and other online purchases for Facebook members whether or not they are logged into Facebook at the time.  Some of these purchases may be reported to friends of the member in question.  Facebook thinks this is precious in that it builds marketing and tracking information for members it can use with partners.  In return, marketers pay lots and lots of money for this information.  The user probably gets something out of this as well, like the privilege of being tracked by someone other than Google, Yahoo!, Microsoft, AOL, etc.

The program was not well received when it was started.  Users were forced to opt out, and the that was not all that easy.  The public outcry forced a change.  Now people opt in.  The suit charges that even though someone has not opted into the program, the information is still collected and revealed to Facebook. 

Blockbuster, for its part, says there are numerous levels of privacy protection for users and they will vigorously defend the suit.  The statute says information about selections can be disclosed in the ordinary course of business, but defines that very specifically as:

(2) the term ‘‘ordinary course of business’’
means only debt collection activities, order
fulfillment, request processing, and the transfer
of ownership;

The full act is at 18 USC § 2710.  It does allow for some marketing information in very limited circumstances, though it is unclear whether Blockbuster and Facebook's practices fall within those circumstances.  That would be 2710(b)(2)(D)(ii).  However, the language suggests that Facebook would have to market directly to the consumer.  However, section (i) requires a clear and conspicuous manner for the consumer to prohibit such disclosure.  As with the Microsoft Vista Capable case, the more interesting information may be disclosures of business practices in detail more than the actual result. 

A report of the April 9th suit, which is seeking class action status, is in CNNMoney.  The case is noted on the Justia dockets site, but the papers aren't available at this time.  There is only one case that has been decided under the Act, Dirkes v. Borough of Runnemede, (D.N.J.1996), 936 F.Supp. 235.  Perhaps there will be more as a result of this action. 

The text of the Act:

§ 2710. Wrongful disclosure of video tape rental
or sale records
(a) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘consumer’’ means any renter,
purchaser, or subscriber of goods or services
from a video tape service provider;
(2) the term ‘‘ordinary course of business’’
means only debt collection activities, order
fulfillment, request processing, and the transfer
of ownership;
(3) the term ‘‘personally identifiable information’’
includes information which identifies
a person as having requested or obtained specific
video materials or services from a video
tape service provider; and
(4) the term ‘‘video tape service provider’’
means any person, engaged in the business, in
or affecting interstate or foreign commerce, of
rental, sale, or delivery of prerecorded video
cassette tapes or similar audio visual materials,
or any person or other entity to whom a
disclosure is made under subparagraph (D) or
(E) of subsection (b)(2), but only with respect
to the information contained in the disclosure.
(1) A video tape service provider who knowingly
discloses, to any person, personally identifiable
information concerning any consumer of such
provider shall be liable to the aggrieved person
for the relief provided in subsection (d).
(2) A video tape service provider may disclose
personally identifiable information concerning
any consumer—
(A) to the consumer;
(B) to any person with the informed, written
consent of the consumer given at the time the
disclosure is sought;
(C) to a law enforcement agency pursuant to
a warrant issued under the Federal Rules of
Criminal Procedure, an equivalent State warrant,
a grand jury subpoena, or a court order;
(D) to any person if the disclosure is solely
of the names and addresses of consumers and
(i) the video tape service provider has provided
the consumer with the opportunity, in
a clear and conspicuous manner, to prohibit
such disclosure; and
(ii) the disclosure does not identify the
title, description, or subject matter of any
video tapes or other audio visual material;
however, the subject matter of such materials
may be disclosed if the disclosure is for
the exclusive use of marketing goods and
services directly to the consumer;
(E) to any person if the disclosure is incident
to the ordinary course of business of the video
tape service provider; or
(F) pursuant to a court order, in a civil proceeding
upon a showing of compelling need for
the information that cannot be accommodated
by any other means, if—
(i) the consumer is given reasonable notice,
by the person seeking the disclosure, of
the court proceeding relevant to the
issuance of the court order; and
(ii) the consumer is afforded the opportunity
to appear and contest the claim of
the person seeking the disclosure.
If an order is granted pursuant to subparagraph
(C) or (F), the court shall impose appropriate
safeguards against unauthorized disclosure.
(3) Court orders authorizing disclosure under
subparagraph (C) shall issue only with prior notice
to the consumer and only if the law enforcement
agency shows that there is probable cause
to believe that the records or other information
sought are relevant to a legitimate law enforcement
inquiry. In the case of a State government
authority, such a court order shall not issue if
prohibited by the law of such State. A court
issuing an order pursuant to this section, on a
motion made promptly by the video tape service
provider, may quash or modify such order if the
information or records requested are unreasonably
voluminous in nature or if compliance with
such order otherwise would cause an unreasonable
burden on such provider.
(c) CIVIL ACTION.—(1) Any person aggrieved by
any act of a person in violation of this section
may bring a civil action in a United States district
(2) The court may award—
(A) actual damages but not less than liquidated
damages in an amount of $2,500;
(B) punitive damages;
(C) reasonable attorneys’ fees and other litigation
costs reasonably incurred; and
(D) such other preliminary and equitable relief
as the court determines to be appropriate.
(3) No action may be brought under this subsection
unless such action is begun within 2
years from the date of the act complained of or
the date of discovery.
(4) No liability shall result from lawful disclosure
permitted by this section.
Personally identifiable information obtained in
any manner other than as provided in this section
shall not be received in evidence in any
trial, hearing, arbitration, or other proceeding
in or before any court, grand jury, department,
officer, agency, regulatory body, legislative
committee, or other authority of the United
States, a State, or a political subdivision of a
subject to this section shall destroy personally
identifiable information as soon as practicable,
but no later than one year from the date the information
is no longer necessary for the purpose
for which it was collected and there are no pending
requests or orders for access to such information
under subsection (b)(2) or (c)(2) or pursuant
to a court order.
(f) PREEMPTION.—The provisions of this section
preempt only the provisions of State or local
law that require disclosure prohibited by this
(Added Pub. L. 100–618, § 2(a)(2), Nov. 5, 1988, 102
Stat. 3195.)

April 18, 2008 | Permalink


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