The news has been buzzing lately about Facebook’s Beacon, where participating websites share personal information with Facebook. Beacon originally had a poor notice and opt-out policy, but after significant public criticism, Facebook changed to an opt-in policy. Even under the new opt-in policy, however, the participating companies are still turning data over to Facebook, and that spells potential trouble for at least one of the 40 companies in the Beacon program — Blockbuster Video.
Over at Laboratorium, Professor James Grimmelmann (NY Law School) has an excellent post arguing that Blockbuster’s participation in Facebook’s Beacon violates the Video Privacy Protection Act (VPPA), 18 U.S.C. § 2710. James writes:
The VPPA states:
A video tape service provider who knowingly discloses, to any person, personally identifiable information concerning any consumer of such provider shall be liable….
18 U.S.C. § 2710(b)(1). The important first question is who’s a “video tape service provider.” That’s defined in paragraph (a)(4):
[T]he 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. . . .
Blockbuster clearly qualifies as a video tape service provider. To the extent it transmits information to Facebook about a customer’s video purchases — no matter what Facebook ultimately does with that data (i.e. regardless of whether it appears in a person’s profile, is stored by Facebook in a database, or is deleted), Blockbuster could be liable under VPPA. The statute is an opt-in statute, requiring that the customer provide “informed written consent . . . at the time the disclosure is sought” in order for the disclosure to be permissible.
James also analyzes whether Facebook could be liable as well:
There’s the joint enterprise theory; since Facebook and Blockbuster acted together, and Blockbuster is liable, so too is Facebook. There’s a split in the VPPA caselaw as to whether liability runs only against the video tape service provider, or can run also against the person who induced the disclosure.
Put this all together, and the legal situation looks a bit bleak for Facebook and Blockbuster. The VPPA provides damages of $2,500 per violation, plus punitive damages and attorneys’ fees. I have no idea how many movies wound up in people’s news feeds, but it doesn’t have to be too many for the total to hurt. Class action lawyers, start your engines.