In a letter to investors that accompanied its financial results Monday, Netflix said that this fall it will launch its Facebook integration in Canada and Latin America but not in the U.S.
The reason: The Video Privacy Protection Act, a 1988 law that forbids the disclosure of people's video rental information. Companies that violate the law are liable up to $2,500 for each infraction.
The VPPA was passed in response to the disclosure of Bork's history of video rentals during his failed nomination to the U.S. Supreme Court in 1987. Blockbuster ran afoul of the law in 2008, when a Texas woman sued — claiming that the video rental service had violated the privacy protections when it shared her rental history with Facebook through the social network's Beacon ad program.
Netflix's Facebook application, which would make recommendations to users based on the preferences of their friends, could violate the VPPA, leading to the company's decision not to launch in the U.S.
"Under the VPPA, it is ambiguous when and how a user can give permission for his or her video viewing data to be shared," Netflix chief executive Reed Hastings and chief financial officer David Wells wrote in the letter to investors.
They said they support a bill pending in the House of Representatives that would clafify when and how a user can give such permission.
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