Who is a "consumer" covered by the Video Privacy Protection Act? It depends where you ask. The US Courts of Appeals for the Sixth Circuit and the Seventh Circuit recently arrived at different answers to the question within a week of each other.
This circuit split has substantial consequences for VPPA claims alleging that pixels and other online tracking technologies unlawfully disclose personally identifiable video watching history.
These decisions could reinvigorate plaintiffs' interest in VPPA claims, which come with $2500 in potential statutory damages for violations. At a minimum, by expanding potential liability, these decisions raise the stakes of companies' VPPA compliance efforts.
The Question
The VPPA makes it unlawful for a "video tape service provider," or VTSP, to "knowingly" disclose "personally identifiable information concerning any consumer of such provider."
"Consumers" are defined as any "renter, purchaser, or subscriber of goods or services from a video tape service provider," and such VTSPs as anyone engaged in the "rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials."
Defendants argue the VPPA applies to consumers of audio-visual materials only, while plaintiffs contend it applies to consumers of all "goods and services" provided by a video tape service provider.
Circuits Split Answers
The three circuit decisions addressing the "consumer" in the context of pixel litigation involved plaintiffs who claimed to qualify for protection as "subscribers." Each provided information, such as their email or zip code, to sign up for free user accounts or newsletters. Each plaintiff allegedly accessed videos on webpages that hosted a "Meta pixel," which, they claimed, tracked and disclosed their identities (associated with a unique Facebook ID) and video watching history to Meta.
Siding with the defendant in Salazar v. Paramount Global, the majority of a divided Sixth Circuit held last month that the "most natural reading" of the VPPA is that "a person is a 'consumer' only when he subscribes to 'goods or services' in the nature of 'video cassette tapes or similar audio visual materials.'" The Sixth Circuit concluded that a newsletter subscriber wasn't a consumer of goods or services from a VTSP because the newsletter itself wasn't an audio-visual material and links to videos within were accessible to anyone.
Dissenting, Judge Rachel Bloomekatz echoed the conclusions reached by the Seventh Circuit days earlier in Gardner v. Me-TV, and previously reached by the Second Circuit in Salazar v. NBA—that the VPPA applies to consumers of all "goods and services" obtained from a VTSP, because the definition of "consumer" doesn't include that limitation included in the definitions of VTSP and personally identifiable information.
To take the Second Circuit's example, a consumer who buys a hammer—or any other non-video material—and then watches free videos on the vendor's website enjoys the privacy protections of the VPPA.
Whether the Sixth Circuit's Paramount decision represents an outlier, or the beginning of a defendant-favorable trend, remains uncertain. Petitions for rehearing en bancare pending in Paramount and MeTV, as is one for US Supreme Court review in NBA. Even with the new circuit split, it's unclear whether the Supreme Court will take up this issue on its already-busy docket. Conflicting approaches to the VPPA may persist.
Practical Implications
By interpreting the VPPA to extend beyond consumers of audiovisual material to encompass cross-product and cross-platform customer relationships, the Seventh and Second Circuits have substantially increased the scope of VPPA compliance risks connected to VPPA's $2500 in statutory damages for violations. Under their broad approach, any customer, from brick-and-mortar patrons to online browsers, could become a VPPA plaintiff simply by viewing an online video with an embedded pixel.
Notably, there isn't yet any direction about how long a consumer relationship persists after an initial purchase, rental, or subscription.
The risk of expanded VPPA liability is particularly acute for the "subscriber" subcategory of VPPA consumers. These recent decisions reflect some receptiveness to plaintiffs' argument that collecting even minimal amounts of user information, such as email and IP addresses, needed for online customer interaction could give rise to a subscriber relationship.
According to the Seventh Circuit: "In an Information Age, data can be worth more than money. If paying $1 a year to MeTV would produce a subscription, then providing $1 worth of information must do so too."
The Paramount dissent went even further: "If a [VTSP] can link a person's personal information to their video preferences, Congress would have wanted to prohibit disclosure, regardless of whether the information came from the precise transaction involving the video material or got 'stitched together' with other, non-video transactions. It makes no difference for achieving the statute's privacy goals."
Applying this rationale, future VPPA plaintiffs will likely seek to qualify as subscribers based on their having provided data in contexts that had nothing to do with video, such as signing up for marketing emails or customer loyalty programs.
While working to swing the weight of authority toward the Sixth Circuit's narrow approach, companies should seriously consider implementing procedures for obtaining VPPA-compliant consent for all audiovisual materials on their websites, even if the content is free or unrestricted.
Originally published by Bloomberg Law.
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