Did Blockbuster, Facebook Break Privacy Law With Beacon?

Just when you thought the Facebook/Beacon scandal had been laid to rest, I find this article in PC World.

Apparently, there's a 1988 law called the Video Privacy Protection Act (VPPA). The law clearly "prohibits movie rental companies such as Blockbuster from disclosing personally identifiable rental records of the people who rent or buy movies from them to others -- unless the customer consents to the practice in writing."

We also happen to know that movie choices made by Facebook members on Blockbuster's website were made available to other members of the social network.

PC World details the story:

The case against Blockbuster is quite straightforward," said James Grimmelmann, associate professor at the New York Law School. "I'm surprised that there haven't been lawsuits already in terms of Blockbuster. The one against Facebook requires a couple more steps. It's one of those interesting issues" that can be viewed in multiple ways legally.

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Civil remedies under the law include fines of at least US$2,500 for each violation. In the few situations where the law has been invoked, the cases involved the disclosure of customer movie rental records to law enforcement authorities by rental companies. The law has never been tested in an online situation such as the one involving Blockbuster and Facebook, and could raise interesting issues, according to Grimmelmann.

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Facebook's Beacon ad service was released in early November as a part of the Facebook Ads platform. It is ostensibly designed to track the activities of Facebook users on more than 44 participating Web sites and to report those activities to the users' Facebook friends, unless specifically told not to do so. The idea is to give participating online companies a way to monitor the activities of Facebook users on their Web sites and to use that information to then deliver targeted messages to Facebook friends.

The problem with that arrangement, at least for Blockbuster, is that such information sharing put it in violation of VPPA before Facebook changed its privacy policies following an outcry over Beacon, Grimmelmann said. The mere fact that Blockbuster passed on movie choice information to Facebook friends without user consent is a violation of VPPA...

Click here to read the article in its entirety.