Netflix Pays $9 Million Over Consumer Privacy Violation Lawsuit

Netflix is perhaps very unique among other companies in the realm of internet, in that it has had a very turbulent last year. Some companies went down while other went way up (hint: Apple) but Netflix had a bit of a mix of both. It started off fairly well, rose to high share value at the start of 2011 and then plummeted. Soon after, it gained a huge customer base, lost it and then regained it yet again. One final thing against the company was a lawsuit against it over allegations of consumer’s privacy violation. Netflix has now agreed to pay $9 million over the lawsuit to end it’s problems, once and for all.

This is definitely a wise move by the company. The start of a fresh year has seen more and more subscribers garnered by the video subscription service. It was about time it had it’s act straight and sort out all the major hassles.

The lawsuit against the company had been filed in San Francisco’s federal court on behalf of Jeff Milans and Peter Coffstock. The law, which Netflix was accused of violating, is Video Privacy Protection Act. Under this law, it is illegal for a video rental service to reveal information regarding what videos a subscriber watches. The case was filed under the allegation that Netflix kept records of the users until after two years of cancellation of subscription.

According to Netflix, the fact that it has agreed to settle the case doesn’t mean that it is admitting the charge. One reason why the company went for the ‘expensive’ option could be that it has a fine profit in the final quarter of 2012 and that made it’s big-wigs willing enough to pay the price.

Image courtesy jcestnik.

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