Internet video streaming site Hulu.com is subject to the Video Privacy Protection Act (VPPA), 18 U.S.C. § 2710, according to a recent decision by the U.S. District Court for the Northern District of California, marking the first time a court has subjected a provider of exclusively online streaming video services to the VPPA. This is notable insofar as the VPPA prohibits “video tape service providers” from knowingly disclosing the personally identifiable information (“PII”) of any consumer of the provider except to that consumer, or in limited circumstances, including incident to the provider’s ordinary course of business (as well as disclosure with consumers’ consent, and/or pursuant to a warrant or court order). The VPPA, also requires destruction of PII once no longer necessary for the purposes for which it was collected, and affords those harmed by any act in violation of the VPPA to bring a civil action, which is how the Hulu Privacy Litigation arose. The decision could have a wide-ranging impact on Internet video providers who may have viewed themselves as potentially not subject to the VPPA.
In denying Hulu’s motion to dismiss a class-action suit alleging Hulu wrongfully disclosed users’ PII and video viewing histories to online ad networks and other third parties, the court rejected contentions that the VCR-era VPPA only applied to brick-and-mortar providers of video tapes, and/or only physical audio-visual media. Rather, the court held the VPPA’s reference to “prerecorded video cassette tapes or similar audio visual materials” covers video content in intangible formats, not just hard copies. Further, the VPPA’s legislative history, the court observed, “suggests Congress’s intent to cover new technologies for pre-recorded video content.” Thus, the court held, online streaming video content is covered by the VPPA despite the statute’s emphasis on video tapes.
Hulu also argued its alleged disclosures fell under the VPPA’s exemption for disclosures that are “incident to the ordinary course of business.” However, the court found this to be a material issue of fact that could not be resolved on a motion to dismiss. This is an important point in the VPPA context, and perhaps more globally, as it may require delving into whether deriving revenue from online ad networks is part of the “ordinary course of business” for providers of online services like Hulu (or other websites, or even ISPs or others in the online ecosystem).
Finally, Hulu argued the plaintiffs were not “consumers” under the VPPA – defined as “any renter, purchaser, or subscriber of goods or services from a video tape service provider” – because they used Hulu’s free streaming services. But the court held the plaintiffs could be “subscribers” under the law because the term does not imply payment of money: “If Congress wanted to limit the word ‘subscriber’ to ‘paid subscriber,’ it would have said so.” It will be interesting to see if Hulu proceeds to discovery and a litigated decision, or settles, as Netflix did last year in a similar suit.