United States: Important Circuit Court Ruling Limits Scope Of VPPA Liability

The Eleventh Circuit issued a notable ruling this week limiting a mobile app's liability under the Video Privacy Protection Act (VPPA), 18 U.S.C. § 2710, a law enacted in 1988 to preserve "consumer" personal privacy with respect to the rental or purchase of movies on VHS videotape, and which has been regularly applied to streaming video sites and apps. However, in a significant decision which potentially limits the applicability of the VPPA, the Eleventh Circuit held in Ellis v. The Cartoon Network, Inc., 2015 WL 5904760 (11th Cir. Oct. 9, 2015), that a person who downloads and uses a free mobile app to view freely available content, without more, is not a "subscriber" (and therefore not a "consumer") under the VPPA.

Subject to certain exceptions, the VPPA generally prohibits "video tape service providers" from knowingly disclosing, to a third-party, "personally identifiable information concerning any consumer." 18 U.S.C. §2710(b). Under the VPPA, the term "consumer" means any "renter, purchaser, or subscriber of goods or services from a video tape service provider." 18 U.S.C. §2710(a)(1).

In Ellis, a user who watched video clips on a free app claimed a violation of the VPPA when the app allegedly disclosed his personally identifiable information – his Android ID and video viewing records – to a third-party analytics company for digital tracking and advertising purposes. The plaintiff claims that the analytics company identifies and tracks specific users across multiple devices and applications and can "automatically" link an Android ID to a particular person by using information previously collected from other sources. The lower court had ruled that Ellis was a "subscriber" and therefore a "consumer" under the Act able to bring a cause of action, but that Ellis's Android ID was not "personally identifiable information" under the VPPA. The Eleventh Circuit affirmed the dismissal of the action, but under different reasoning.

While the Eleventh Circuit agreed with the district court that payment is not a necessary element of subscription, it took a narrower view of the definition of a "subscriber" under the Act.

“Payment, therefore, is only one factor a court should consider when determining whether an individual is a "subscriber" under the VPPA. [...] But his merely downloading the CN app for free and watching videos at no cost does not make him a 'subscriber' either.”

As the court pointed out, the plaintiff Ellis did not sign up for or establish an account with Cartoon Network, did not provide any personal information to CN, did not make any payments to use the CN app and did not make any commitment or establish any relationship that would allow him to have access to exclusive or restricted content. Indeed, CN app users can log in with their television provider information to view additional content, but it is not required – if a user simply wants to view freely available content, he or she does not have to create an account. Thus, the court dismissed the action because it concluded that the plaintiff Ellis, as merely a user of a free app, was not a subscriber under the Act:

"[D]ownloading an app for free and using it to view content at no cost is not enough to make a user of the app a ‘subscriber’ under the VPPA. The downloading of an app, we think, is the equivalent of adding a particular website to one's Internet browser as a favorite, allowing quicker access to the website's content."

In deciding the case on the "subscriber" issue, the appeals court offered no opinion on whether an Android ID was "personally identifiable information" under the VPPA, an issue that continues to be litigated.

Ellis, an appellate-level decision, could be an important ruling for companies that develop mobile apps that feature video and collect data for targeted advertising purposes. The 15-page decision deserves a close reading for companies deciding on a business model for mobile apps and offers a level of clarity on what features might allow a free app or an app with a "freemium" pricing strategy to remain outside the scope of the VPPA.

There are still a number of pending VPPA cases focused on the intersection of online video and consumer privacy. In fact, Ellis is merely one decision in a series of appeals court VPPA-related rulings that are expected in the coming year. Stay tuned!

Important Circuit Court Ruling Limits Scope of VPPA Liability

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