Netflix users object to video privacy settlement

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Dozens of Netflix users are filing objections to a class action settlement that would see Netflix pay $9 million to be released from claims that it illegally retained customers video records. The objectors, who are filing their protest with a California court, complain that subscribers receive none of the money.

The settlement is meant to resolve dozens of lawsuits related to Netflix’s decision to retain subscribers’ rental histories for more than one year in violation of the Video Privacy Protection Act. The VPPA is a 1988 law that Congress passed to regulate video stores but, in recent years, it has become a headache for companies like Netflix and Facebook.

The Netflix settlement, which affects tens of millions of subscribers nationwide, was proposed in February and a federal judge gave it a conditional green light in July. Since then, lawyers have been sending out millions of emails to notify customers. The judge also ordered them to place 60 million notification ads on Facebook like this one:

This notification process would normally pave the way for the court to rubber stamp the $9 million deal at a scheduled hearing in December. But that approval may now be at risk given that court records show more than 50 objection letters. The objections vary in length and sophistication but the underlying complaint is the same — that third party privacy groups and lawyers get the money while the subscribers get nothing. You can see another full example below but here is a sample letter from a Michigan woman who notes “We are the customer who was done wrong” :

These objections come as judges are growing skeptical about privacy settlements that fail to do anything for the consumers who are affected. This month, for instance, a California judge refused to approve a $20 million settlement over Facebook’s “Sponsored Stories” on the grounds that half the money went to the lawyers and none to users. In the past, similar settlements involving products like Google Buzz and Facebook Beacon have typically sailed through the courts with only a handful of objections.

Here’s a sample objection:

Netflix Objection

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