Published by LawTechie - November 13, 2013 - LawTechie

Internet LawBack in October Hulu attempted to dismiss the class action brought against it by users whose information was allegedly shared with third-party advertisers by arguing that the Video Privacy Protection Act (VPPA) does not apply to plaintiffs who do not (or cannot) allege exact monetary damages. Now the users have responded by pointing out that Hulu’s reading of the VPPA makes no sense.

Brief Background (from MediaPost).

Hulu previously acknowledged in court papers that it discloses data to third parties, but says that it never linked users’ names to their movie-watching history. Instead, it assigns users a seven-digit User ID, and then transmits data about that User ID.

The consumers alleged in their lawsuit that third parties could figure out people’s identities from their User IDs, given that Hulu included the User ID in the Web page addresses of users’ profile pages. Hulu, which stopped transmitting User IDs two years ago, countered that there’s no proof that any third parties were able to figure out users’ identities.

Current Argument.

Hulu seeks to dismiss the VPPA-based class action with two arguments:

  1. The language of the VPPA only provides a right of action to those who are “aggrieved” — which Hulu argues should mean proof of actual pecuniary loss; and
  2. The language of the VPPA does not otherwise provide a right of action to those who cannot prove actual pecuniary loss (sort of the converse of the above).

With regard to #1, the users point out that Hulu’s definition of “aggrieved” is quite obviously self-serving and, relating this to #2, the VPPA in fact provides minimum liquidated damages of $2500 per violation which implies that actual pecuniary loss need not be shown to bring a VPPA lawsuit.

In other words, where liquidated damages are, historically, a means to redress harms that are difficult to calculate, Congress would not have included liquidated damages in the VPPA if it did not intend the law to be used by plaintiffs who would have a hard time calculating their actual financial losses from the violation.

I think the users’ argument makes sense. I cannot really see any situation where someone could easily attach an exact financial figure to having his video history shared with third-parties. Maybe someone’s boss finds out that they are into some sort of questionable video content and that person gets fired… but this is a stretch, and one that would not justify an entire Act to be passed by Congress.

Moreover, at the end of the day I am not so sure that actual damages in this case couldn’t be calculated: How much money did Hulu earn for selling users’ information?

This is not a good case for Hulu, and it highlights a positive trend in internet law: If you want to monetize on user info, get consent.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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