[House Report 112-312]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-312
======================================================================
TO AMEND SECTION 2710 OF TITLE 18, UNITED STATES CODE, TO CLARIFY THAT
A VIDEO TAPE SERVICE PROVIDER MAY OBTAIN A CONSUMER'S INFORMED, WRITTEN
CONSENT ON AN ONGOING BASIS AND THAT CONSENT MAY BE OBTAINED THROUGH
THE INTERNET
_______
December 2, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Texas, from the Committee on the Judiciary, submitted the
following,
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 2471]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 2471) to amend section 2710 of title 18, United
States Code, to clarify that a video tape service provider may
obtain a consumer's informed, written consent on an ongoing
basis and that consent may be obtained through the Internet,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
New Budget Authority and Tax Expenditures........................ 5
Congressional Budget Office Cost Estimate........................ 5
Performance Goals and Objectives................................. 6
Advisory on Earmarks............................................. 6
Section-by-Section Analysis...................................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
Additional Views................................................. 7
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. AMENDMENT.
Section 2710(b)(2) of title 18, United States Code, is amended by
striking subparagraph (B) and inserting the following:
``(B) to any person with the informed, written consent
(including through an electronic means using the Internet) in a
form distinct and separate from any form setting forth other
legal or financial obligations of the consumer given at one or
both of the following times--
``(i) the time the disclosure is sought; and
``(ii) in advance for a set period of time or until
consent is withdrawn by such consumer;''.
Purpose and Summary
H.R. 2471 amends section 2710 of title 18, United States
Code, to clarify that a video tape service provider may obtain
a consumer's informed, written consent on an ongoing basis and
that consent may be obtained through the Internet.
Background and Need for the Legislation
In 1988, Congress enacted the Video Privacy Protection Act
to prohibit video service providers from disclosing personally
identifiable information except in certain, limited
circumstances. As a general rule, personally identifiable
information may only be disclosed with the prior written
consent of the consumer.
The impetus for this legislation occurred when a weekly
newspaper in Washington published a profile of Judge Robert H.
Bork based on the titles of 146 films his family had rented
from a video store.\1\ At the time, the Senate Judiciary
Committee was engaged in hearings on Judge Bork's nomination to
the Supreme Court. Members of the Judiciary Committee denounced
the disclosure.
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\1\The Bork Tapes, City Paper, Sept. 25-Oct. 1, 1987, at 1.
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The law prohibits video stores from disclosing ``personally
identifiable information'' that links the customer or patron to
particular materials or services. In the event of an
unauthorized disclosure, an individual may bring a civil action
for damages.\2\
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\2\18 U.S.C. Sec. 2710.
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The law permits the disclosure of personally identifiable
information under certain limited circumstances. For example,
information may be disclosed in response to a court order, and
companies may sell mailing lists that do not disclose the
actual selections of their customers. The law also allows
disclosure with the prior, written consent of the customer and
preserves the rights of customers and patrons under state and
local law.\3\
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\3\Id.
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When this law was originally enacted in 1988, consumers
rented movies from brick-and-mortar videos stars such as
Blockbuster. Today, not only are VHS tapes obsolete, so too are
traditional video rental stores. The Internet has
revolutionized how consumers rent and watch movies and
television programs. Video stores have been replaced with ``on-
demand'' cable services or Internet streaming services that
allow a customer to watch a movie or TV show from their laptop
or even their cell phone.
The Internet has also revolutionized how we share
information about ourselves with others. In the 1980's, when
one wished to recommend a movie to friends, they would likely
call them on the telephone. In the 1990's, they would send an
email. Today, they post their opinions on their social
networking page.
Since 1988, Federal law has authorized video tape service
providers to share customer information with the ``informed,
written consent of the consumer at the time the disclosure is
sought.''\4\ This consent must be obtained each time the
provider wishes to disclose. No similar restriction exists for
disclosure of consumer information relating to book or music
preferences. Requiring consumers to consent to disclosure every
time it is sought prevents consumers from sharing information
about their movie preferences through social media sites on an
ongoing basis.
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\4\18 U.S.C. Sec. 2710(b)(2(B).
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H.R. 2471 remedies this restriction by amending 18 U.S.C.
Sec. 2710 to allow consumers to provide their informed, written
consent once so they can--if they so choose--to continuously
share their movie or TV show preferences through their social
media sites. The legislation does not eliminate the requirement
that consumers ``opt-in'' to this information sharing and it
maintains the requirement of informed written consent. The bill
simply allows for a one-time ``opt-in'' with the option for the
consumer to ``opt-out'' of this sharing agreement at any time.
This legislation does not change the scope of who is
covered by the Act, the definition of ``personally identifiable
information,'' or the privacy standard adopted by Congress when
the Act was first enacted. Specifically, it preserves the
requirement that the user affirmatively provide informed,
written consent.
The Committee does not intend for this clarification to
negate in any way existing laws, regulations and practices
designed to protect the privacy of children on the Internet. As
always, however, the first line of defense to protecting a
child's privacy while online is the parents. Social networking
websites allow users to share personal information about
themselves with their friends. But used inappropriately,
personal information can be shared beyond a user's friends.
Just as parents are responsible for teaching their children not
to talk to strangers, the Committee expects parents to play an
act active role in ensuring their children's' proper use of
social networking or any other websites on the Internet.
Website operators also share in the responsibility to
protect consumer privacy, particularly the privacy of children.
To facilitate this goal, Congress enacted the Children's Online
Privacy Protection Act\5\, effective April 21, 2000, which
applies to the online collection of personal information from
children under 13. Compliance with the Act is overseen by the
Federal Trade Commission (FTC), which enacted rules governing
web site operator compliance, including a privacy policy, when
and how to seek verifiable consent from a parent, and what
responsibilities an operator has to protect children's privacy
and safety online.\6\
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\5\Pub. L. No. 105-277, 112 Stat. 2581-728, codified at 15 U.S.C.
Sec. Sec. 6501-6506, Oct. 21, 1998.
\6\How to Comply with the Children's Online Privacy Protection
Rule, Bureau of Consumer Protection Business Center, Federal Trade
Commission, Dec. 2006, available at http://business.ftc.gov/documents/
bus45-how-comply-childrens-online-privacy-protection-rule.
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An operator of commercial website or online service
directed to children under 13 that collects personal
information from children or operator of a general website with
actual knowledge that it is collecting personal information
from children must comply with the Act.\7\
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\7\Id.
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To determine whether a website is directed to children, the
FTC considers several factors, including the subject matter,
visual or audio content, the age of models on the site,
language, whether advertising on the website is directed to
children, information regarding the age of the actual or
intended audience, and whether a site uses animated characters
or other child-oriented features.\8\
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\8\Id.
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To determine whether an entity is an ``operator'' with
respect to information collected at a site, the FTC will
consider who owns and controls the information, who pays for
the collection and maintenance of the information, what the
pre-existing contractual relationships are in connection with
the information, and what role the Web site plays in collecting
or maintaining the information.\9\
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\9\Id.
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The Act and its regulations apply to individually
identifiable information about a child that is collected
online, such as full name, home address, email address,
telephone number or any other information that would allow
someone to identify or contact the child. The Act and Rule also
cover other types of information--for example, hobbies,
interests and information collected through cookies or other
types of tracking mechanisms--when they are tied to
individually identifiable information.\10\
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\10\Id.
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Hearings
The Committee on the Judiciary held no hearings on H.R.
2471.
Committee Consideration
On October 13, 2011, the Committee met in open session and
ordered the bill H.R. 2471 favorably reported, with an
amendment, by voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that there
were no recorded votes during the Committee's consideration of
H.R. 2471.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 2471, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 25, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2471, a bill to
amend section 2710 of title 18, United States Code, to clarify
that a video tape service provider may obtain a consumer's
informed, written consent on an ongoing basis and that consent
may be obtained through the Internet.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark
Grabowicz (for Federal costs), who can be reached at 226-2860,
and Paige Piper/Bach (for the impact on the private sector),
who can be reached at 226-2940.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 2471--A bill to amend section 2710 of title 18, United States
Code, to clarify that a video tape service provider may obtain
a consumer's informed, written consent on an ongoing basis and
that consent may be obtained through the Internet.
As ordered reported by the House Committee on the Judiciary on
October 13, 2011
Current law permits businesses that rent, sell, or deliver
audio visual materials to disclose personal information about
customers to other persons if the customer grants written
consent. H.R. 2471 would clarify that such consent may be given
beforehand through the use of the Internet. CBO estimates that
implementing the bill would have no significant cost to the
Federal Government. Enacting the bill would not affect direct
spending or revenues; therefore, pay-as-you-go procedures do
not apply.
H.R. 2471 contains no intergovernmental mandates as defined
in the Unfunded Mandated Reform Act (UMRA) and would not affect
the budgets of State, local, or tribal governments.
H.R. 2471 would impose a private-sector mandate, as defined
in the UMRA, by requiring providers of video tape services and
other entities to use ``distinct and separate'' forms when
obtaining consent to disclose a consumer's personally
identifiable information. At the same time the bill would
benefit providers and other entities by allowing them to obtain
consent via the Internet, in advance, and only once until
consent is withdrawn. Current law requires written consent each
time discloser of a consumer's information is sought. Based on
information from industry sources, CBO estimates that there
would be no significant net costs to comply with the mandate;
thus any costs would fall well below the annual threshold
established in UMRA for private-sector mandates ($142 million
in 2011, adjusted annually for inflation).
The CBO staff contacts for this estimate are Mark Grabowicz
(for Federal costs) and Paige Piper/Bach (for the impact on the
private sector). The estimate was approved by Theresa Gullo,
Deputy Assistant Director for Budget Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
2471, clarifies that a video tape service provider may obtain a
consumer's informed, written consent on an ongoing basis and
that consent may be obtained through the Internet.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 2471 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1: Amendment.
Section 1 amends section 2710(b)(2) of title 18 to
authorize consumers, in a form distinct and separate from any
form setting forth other legal or financial obligations, to
provide informed, written consent for the sharing of personally
identifiable information related to movie rentals either (1) at
the time the disclosure is sought, or (2) in advance of the
disclosure for a set period of time or until consent is
withdrawn by the consumer.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 121--STORED WIRE AND ELECTRONIC COMMUNICATIONS AND
TRANSACTIONAL RECORDS ACCESS
* * * * * * *
Sec. 2710. Wrongful disclosure of video tape rental or sale records
(a) * * *
(b) Video Tape Rental and Sale Records.--(1) * * *
(2) A video tape service provider may disclose personally
identifiable information concerning any consumer--
(A) * * *
[(B) to any person with the informed, written consent
of the consumer given at the time the disclosure is
sought;]
(B) to any person with the informed, written consent
(including through an electronic means using the
Internet) in a form distinct and separate from any form
setting forth other legal or financial obligations of
the consumer given at one or both of the following
times--
(i) the time the disclosure is sought; and
(ii) in advance for a set period of time or
until consent is withdrawn by such consumer;
* * * * * * *
Additional Views
There is no denying that the computer age has
revolutionized our world. Over the past 20 years we
have seen remarkable changes in the way each one of us
goes about our lives. Our children learn through
computers. We bank by machine. We watch movies in our
living rooms. These technological innovations are
exciting and as a Nation we should be proud of the
accomplishments we have made.
Yet as we continue to move ahead, we must protect
time honored values that are so central to this
society, particularly our right to privacy. The advent
of the computer means not only that we can be more
efficient than ever before, but that we have the
ability to be more intrusive than ever before. Every
day Americans are forced to provide businesses and
others personal information without having control over
where that information goes . . . These records are a
window into our loves, likes, and dislikes.\1\
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\1\Statement of Senator Paul Simon, 134 Cong. Rec. S 5401 (May 10,
1988) (quoted in S. Rep. No. 100-599 (1988), The Video Privacy
Protection Act of 1988, at 6-7)
Because I believe these words, spoken by Senator Paul Simon
during debate on the Video Privacy Protection Act (VPPA),\2\
are equally applicable today I cannot support H.R. 2471 in its
current form. The VPPA was passed in 1988 following bipartisan
outrage over the disclosure and publication of Supreme Court
nominee Judge Robert Bork's video rental records. Proponents of
the bill argue that the VPPA is outdated and that changes in
the commercial video distribution landscape beg for
modernization. Although the commercial distribution landscape
has changed the underlying concerns that inspired passage of
the VPPA are timeless. Indeed, as reflected in the opening
quote, Congress carefully weighed the interests in furthering
technological advancement and consumer privacy at the time the
Act was passed. Privacy and liberty go hand-in-hand and,
through considered action, may be advanced by technology.
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\2\18 U.S.C. Sec. 2710.
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Though well-intentioned, in my opinion H.R. 2471, falls
short of preserving the time-honored right to privacy embodied
by the VPPA by surrendering to technological expediency without
carefully weighing and evaluating the potential consequences of
the bill's provisions. First, the debate on H.R. 2471
myopically focused on the online experience of consumers with
social media like Facebook, neglecting that (a) the bill will
apply both in the physical and online environments and (b)
disclosures will be authorized ``to any person,'' not only
``friends'' on Facebook. Second, there was no evidence
presented to support the assertion that the public hungers for
the ``service'' the bill seeks to provide. Third, despite
claims that the VPPA is outdated, only a single provision was
``updated,'' leaving more consumer oriented provisions
untouched. Fourth, no consideration was given to the effect of
the changes to the VPPA on state laws that afford similar
protections to consumers. Fifth, I believe that there are
collateral yet important intellectual property enforcement
issues under the surface of this debate. Finally, because this
bill was brought to markup without the benefit of a hearing, I
believe it is premature to move forward without further
consideration of these issues. Each of these concerns is
discussed in greater detail below.
I. H.R. 2471 WILL APPLY TO ALL ``VIDEO TAPE SERVICE PROVIDERS'' AS
DEFINED BY VPPA AND DISCLOSURES WILL BE AUTHORIZED TO ``ANY PERSON''
During the discussion on H.R. 2471, much emphasis was
placed on allowing technology to provide a seamless process to
share video viewing habits on social media in the same manner
currently in use for music, books and news articles.\3\ But the
bill, by its own terms, would apply to new and old distribution
methods alike. Therefore, the consumer could unwittingly become
the victim of the very scenario that prompted passage of the
VPPA in the first place. There is nothing in the bill that
would prevent a newspaper reporter from obtaining the rental or
viewing history of a consumer who has opted-in to an enduring,
universal consent to have their viewing records disclosed ``to
any person.'' Admittedly, a consumer may have the presence of
mind to reject such an expansive disclosure at her local brick-
and-mortar video store, but her privacy may nonetheless be
compromised should she grant such permission online. In other
words, nothing in the bill mandates that the disclosure be
limited to social media integration. The bill gives carte
blanche to the video tape service provider, whether online or
not, to determine who the ``any person'' may be so long as they
obtain the ``informed'' consent in a conspicuous manner.
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\3\Much has been made about the presumed disparity in treatment of
video history as opposed to a consumer's reading lists or musical
consumption habits. At the time the VPPA was enacted there were no
comparable commercial music or book rental entities. The Committee
Report did note, however, that the Senate subcommittee considered and
``reported a restriction on the disclosure of library borrower records
. . . [but] was unable to resolve questions regarding the application
of such a provision for law enforcement.'' S. Rep. No. 100-599 (1988),
at 8.
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My concerns are not assuaged, and indeed are exacerbated,
when consent is sought in the online environment. At a time
when the broader privacy debate is trending towards
establishing some baseline privacy protections for consumers
online\4\, this bill moves in the opposite direction. Although
there is an opt-out provision in the bill, I do not believe
that it will adequately address the realities of privacy in
this age of instant and widespread information dissemination
and consumption.
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\4\A Preliminary Federal Trade Commission Staff Report on
Protecting Consumer Privacy in an Era of Rapid Change: A Proposed
Framework for Businesses and Policymakers (Dec. 1, 2010), available at
http://www.ftc.gov/os/2010/12/101201privacyreport.pdf
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Facebook--the largest social media network -boasts 800
million users, with the average user having 120 ``friends.''
But because Facebook, and most social mediums, are dynamic with
a user's roster of friends constantly in flux, a consumer's
consent today to allow ongoing access to their viewing history
is clearly not informed by who will be their ``friend''
tomorrow. Today when online bullying of teen and young adults
can lead to depression or even suicide, where online predators
can learn otherwise confidential, private information about
their prey, I believe we should employ a more deliberative
process. ``[M]ovie and rating data contains information of a
more highly personal and sensitive nature. The member's movie
data exposes a . . . member's personal interest and/or
struggles with various highly personal issues, including
sexuality, mental illness, recovery from alcoholism, and
victimization from incest, physical abuse, domestic violence,
adultery, and rape.''\5\ We should not cavalierly grant access,
even if the public demands it.
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\5\Ryan Singed, ``Netflix Spilled Your Brokeback Mountain Secret,
Lawsuit Claims,'' Wired, December 17, 2009, available at: http://
www.wired.com/threatlevel/2009/12/netflix-privacy-lawsuit.
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II. THERE IS NO EVIDENCE THAT THERE IS BROAD PUBLIC SUPPORT FOR THESE
LIMITED AMENDMENTS TO THE VPPA
Although it is not my practice to publicly name specific
stakeholders that support or oppose a particular piece of
legislation, one company has placed itself squarely in the
center of this debate and its business model, its aspirations
to integrate with Facebook, and its online history with some of
the issues at the core of the privacy concerns require specific
reference. That company is Netflix. I will say at the outset
that Netflix is a legitimate and reputable company that
provides a valuable service to its customers. Founded in 1997,
Netflix is the world's leading Internet subscription service.
It provides movies and television shows through mail order DVD
and online streaming services. With 900 employees, Netflix has
25 million subscribers worldwide.\6\
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\6\Netflix Company Facts, https://account.netflix.com/MediaCenter/
Facts last visited Nov. 29, 2011).
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In September 2011, Netflix launched a public campaign in
support of H.R. 2471, urging its members to contact Congress to
help bring Facebook sharing to Netflix USA.\7\ Chairman
Goodlatte suggested during the markup that if I ``go online and
read the blog posts and so on that exist, the gentleman will
find that there is a lot of popular public support for this
because they don't understand why their freedom to do this for
music and books and a whole host of other types of information
that they share online is restricted in this case.''\8\ I did.
And far from the overwhelming outcry for Netflix-Facebook
integration, I found skepticism and outright rejection of the
proposed innovation. Three representative comments follow:
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\7\Netflix has integrated user accounts in Canada and Latin America
with Facebook, but advised its American customers that the VPPA
``creates some confusion over our ability to let U.S. members
automatically share the television shows and movies they watch with
their friends on Facebook.'' Posting of Michael Drobac to The Netflix
Blog, ``Help us Bring Facebook Sharing to Netflix USA,'' (Sept. 22,
2011), http://blog.netflix.com/2011/09/help-us-bring-facebook-sharing-
to.html.
\8\Transcript of Full Committee Markup Report of H.R. 2471, et
seq., at 16 (Oct. 13, 2011), available at http://judiciary.house.gov/
hearings/pdf/10%2013%2011%20HR%202471.pdf
Blogger #1: ``How about we have Congress deal with more
important matters than whether I can share what I'm
watching on Netflix through Facebook.''\9\
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\9\The Netflix Blog, supra note 7.
Blogger #2: ``I agree, who cares! I am not going to
watch movies on my [Facebook]. FB has lots of security
issues don't need the head aches. [sic] . . . ''\10\
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\10\Id.
Blogger # 3: ``Dislike. Facebook already weasels too
much information from people without asking permission
and without giving the option to say no. I want NOTHING
about me and my online video watching behaviors shared
with anyone, especially Facebook of all places.''\11\
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\11\Posting of T. Willerer, The Netflix Blog, ``Watch this now:
Netflix & Facebook,'' (Sept. 22, 2011), http://blog.netflix.com/2011/
09/watch-this-now-netflix-facebook.html.
These comments should have come as no surprise to Netflix.
Several years ago the company introduced a ``Friends'' feature
on its site which allowed Netflix users to connect with other
Netflix members accounts in order to share viewer lists and
recommend movies to one another. The feature ultimately proved
unpopular and was discontinued in 2010 after 6 years with only
2% of subscribers participating.\12\ Even during its pendency,
the feature was met with opposition from Netflix account
holders causing a member of the Netflix technological team to
concede on the Netflix blog:
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\12\Posting of Todd Yellin, The Netflix Blog, ``Friends Update,''
(March 17, 2010), http://blog.netflix.com/2010/03/friends-update.html.
``I'm with y'all. I watch a lot of movies, and I love
the Friends features, but I'll admit that there are
titles i [sic] watch that i'm [sic]--how you say--less
than thrilled to announce are in my Queue. At Netflix
we try to have this deep honesty policy: we generally
say whatever we're thinking to whoever needs to hear
it. And this pervasive attitude has crept into Friends,
such that the thinking was ``if you're REALLY friends,
then you should be okay showing them what you're really
watching.'' But you (and I) know this is lousy. I'm
happy to reveal pretty much anything about myself, but
there is a level of scrutiny that makes even an open
guy like me pretty uncomfortable. Once in awhile you
just need to hide a movie from your friends, or parents
. . .''\13\
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\13\Posting of Rubin, The Netflix Blog, ``Hiding Movies,'' (June
28, 2007); see also Posting of Rubin, The Netflix Blog, ``Movie Privacy
(the sequel to ``Hiding Movies''), (July 7, 2007) (acknowledging
members ``overwhelming response'' and desire to keep ``Friends from
seeing those pesky embarrassing titles'').
Additionally, Netflix attempted a second route into the social
networking scene: a Facebook program that allowed users to rate
movies and television shows, and share the ratings with
``friends'' on Facebook. The program was unsuccessful and
unceremoniously discontinued earlier this year. \14\
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\14\Posting by Tom Willerer, The Netflix Blog, ``Connecting with
your Friends on Netflix'' (Jan. 11, 2011), http://blog.netflix.com/
2011/01/connecting-with-your-friends-on-netflix.html (``Two years ago
we launched a program for Netflix members to share their ratings on
Facebook. Very few of you have signed on for this so we're pulling it
back today to regroup . . .'').
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Apple Inc. also tried its own foray into social networking, meeting
with equal disappointment. See, Posting by Jared Newman, ``In Sign of
Ping Flop, Apple Pleas for Users,'' Technologizer (Nov. 5, 2010),
http://technologizer.com/2010/11/05/apple-ping-flop
``I've got a few guesses why social efforts from Apple and Netflix's
don't work: . . . and watching a movie or listening to music is often a
personal thing, and only folks who are really confident in their tastes
will care to share.'' [Posting by Jared Newman, ``Netflix Quits Social
Networking--Again,'' Technologizer (Jan. 13, 2011), http://
technologizer.com/2011/01/13/netflix-quits-social-networking-again/]
While public support alone should not dictate whether
Congress passes a piece of legislation, the total lack of
evidence that the American people need or desire a new law
certainly relieves any pressure to rush this bill towards
enactment.
III. ONLY A SINGLE PROVISION OF THE VPPA IS ``UPDATED'' BY
h.r. 2471, leaving more consumer oriented provisions untouched
In the inexplicable rush to bring this bill before the
Committee, I believe important consumer protection issues were
overlooked. The VPPA was enacted to protect consumer interest,
specifically, to prevent wrongful disclosures of personally
identifiable records containing an individual's video rentals.
Yet, H.R. 2471 singularly focuses on facilitating disclosure,
not preventing or limiting it. The bill's exclusive aim is to
provide a safe haven for wide-scale disclosures made possible
by technological innovation. The goal of insulating personal
information from unwanted disclosure is practically forgotten,
and none of the additional consumer oriented provisions of the
underlying Act are given the slightest consideration. For
example, the VPPA requires destruction of records ``as soon as
practicable, but no later than 1 year from the date the
information is no longer necessary for the purpose for which it
was collected.''
Record retention and destruction plans reinforce policies
designed to deter the abuse or misuse of personally
identifiable material. They generally provide guidelines to
those with access to an individuals' personal information that
prohibit saving documents beyond their usefulness or discarding
them prematurely. The rationale embodied in the provision in
the VPPA that requires the destruction of video records no
later than a year after the record was established is clearly
driven by the desire to prevent stockpiling of old and outdated
data on any person. True modernization of the VPPA would have
considered the applicability of that provision in the online
environment.
Many Internet companies have been found to track, retain,
market and mine information on their customers at an alarmingly
high rate.\15\ Conventional wisdom teaches that once
information is posted on or over the Internet, it remains
stored there forever. Thus, while record destruction in the
physical world is easily effected and verifiable, the same is
not the case in the virtual world. The question arises then
whether different requirements should be fashioned in this bill
to make sure that the policy objectives of the destruction of
old records requirement in the VPPA are met in the online
environment.\16\
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\15\See, ``The Web's New Gold Mine: Your Secrets,'' WSJ Julia
Angwin (July 30, 2010).
\16\Netflix is currently in class action litigation over claims
that the company's practice of keeping the rental history and ratings
``long after subscribers cancel their Netflix subscription,'' violates
the VPPA. http://www.huntonprivacyblog.com/2011/03/articles/netflix-
sued-for-allegedly-violating-movie-renters-privacy/
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Finally, while easing the restrictions on video service
providers disclosing consumers' video histories, the bill does
nothing to ``update'' the damages provision for consumers
harmed by violations of the VPPA. In 1988 when the VPPA was
passed, Congress determined that a minimum of $2,500 in actual
damages was an adequate deterrent to discourage violations of
the Act. Certainly that figure, although a floor is outdated
today where revenues earned by companies online can reach the
billions.
IV. NO CONSIDERATION WAS GIVEN TO THE EFFECT OF THE CHANGES TO THE VPPA
ON STATE LAWS THAT AFFORD SIMILAR PROTECTIONS TO CONSUMERS
According to the Electronic Privacy Information Center
(EPIC), many states have laws that extend greater protections
to consumers and their video records than does the VPPA. Among
the states that have adopted comparable or stronger measures
are: Connecticut, Maryland, California, Delaware, Iowa,
Louisiana, New York, Rhode Island and Michigan. Michigan's law
actually applies to book purchases, rental and borrowing
records, as well as to video records. What practical impact
H.R. 2471 would have on those states laws is unknown. The VPPA
expressly preserves state law that establishes more robust
safeguards for consumers in their relationships with video
rental services. The Act, however, preempts state law that
requires the disclosures banned by the VPPA.
V. SIGNIFICANT INTELLECTUAL PROPERTY (IP)
ENFORCEMENT ISSUES EXIST
As noted above, Netflix's business model consists of a dual
delivery method for movies and television. The company provides
a mail order service for physical copies of DVDs, and a
streaming service to watch movies directly over the Internet.
Application of the amendments to the VPPA provided in H.R. 2471
make no distinction, however, as to which viewing history is
covered. There is little doubt that Netflix's DVD by mail
service is considered a videotape service provider under the
statute. But no Internet streaming service has ever been
determined to be covered by the statute. The only court that
has considered the issue rejected the argument that an online
streaming service was prohibited (in an action alleging
copyright infringement against the service), from producing its
video history in discovery to enable the rights holder to
determine whether the content was infringing.\17\ Left
unresolved and confusing by H.R. 2471 is whether dual service
companies like Netflix should be considered a video tape
service provider covered by the VPPA for social networking
purposes but fall beyond the statutes' reach for IP enforcement
purposes.
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\17\Viacom International, Inc. v. YouTube, Inc., No. 07 Civ. 2103
(S.D.N.Y., June 23, 2010).
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vi. because the bill was brought to markup without the benefit of a
hearing, it is premature to move forward without further consideration
During markup, I offered two amendments, both designed to
give Internet businesses the necessary flexibility to obtain
electronic consent from consumers, while simultaneously
safeguarding privacy rights. While there may be other more
precise and effective means to balance these objectives, I
believe that the above discussion makes clear that H.R. 2471 is
not that alternative. Far from providing a commonsense solution
to an ill-defined problem, H.R. 2471 raises a mountain of
issues of its own. For the reasons discussed above, I cannot
support H.R. 2471 in its current form and urge its proponents
to seek regular order to provide ample opportunity find a
constructive resolution.
Melvin L. Watt.