Companies tracking your online activities to sell targeted ads is nothing new. But an interesting case out of the Second Circuit Court of Appeals may give some companies food for thought regarding what information about your viewing habits they can sell to third parties.
The Second Circuit has just revived a dismissed class action suit against the National Basketball Association (NBA) for violations of the Video Privacy Protection Act (VPPA). The plaintiff claimed that the NBA unlawfully disclosed his personal viewing information without consent. The new ruling essentially broadens the scope of the VPPA and, in doing so, strengthens the statutes by making it applicable to a modern landscape of digital data sharing.
The VPPA
The Video Privacy Protection Act (VPPA) makes it unlawful for a "video tape service provider" to knowingly disclose personally identifiable information about consumers without their consent, except under specific circumstances. The statute’s text defines a "consumer" as a "renter, purchaser, or subscriber of goods or services from a video tape service provider."
Enacted in 1988, the act was a response to concerns about privacy in the wake of the publication of Judge Robert Bork’s video rental history during his Supreme Court nomination hearings. The VPPA was designed to protect individuals' privacy regarding their video viewing history, reflecting a broader principle that information collected for one purpose should not be used for another without consent.
Although originally focused on video rentals, the VPPA's language has been interpreted to apply to modern digital contexts, where video content is accessed online. Amendments in 2012 allowed for ongoing consent to share viewing information via the internet, but the core privacy protections remain intact, ensuring the Act's relevance in today’s digital age.
NBA.com
The NBA's website, NBA.com, serves as a hub for a wide array of video content, accessible to users free of charge. Michael Salazar was one of the many users that have visited NBA.com, where he watched videos.
However, the site employs a tracking tool known as the "Facebook Pixel," a piece of code embedded within the website. This pixel tracks user interactions, collecting data such as the titles and URLs of videos watched and users' unique Facebook IDs.
This information is then transmitted to Meta, Facebook’s parent company, which allegedly uses it for targeted advertising. By possessing the video title and URL of watched videos associated with a given Facebook ID, Meta can link a given Facebook profile to those watched videos. With that information, Meta can send targeted advertisements to users. The NBA receives financial remuneration from this arrangement.
The NBA’s site also allows people to sign up for their free e-newsletter. Salazar also signed up for the newsletter, giving the NBA his personal information, including his email address. In return, they sent him emails, including the newsletter and other communications.
Salazar’s Suit
Salazar later brought a class action lawsuit on behalf of himself and other users of NBA’s online features, looking to take the basketball association to trial in the United States District Court for the Southern District of New York (the state of its headquarters). He claimed that the NBA violated the VPPA by knowingly disclosing to Meta, without his permission, certain personal information about him, such as his Facebook ID and his video-watching history.
However, the trial court dismissed the case, concluding that Salazar had not plausibly alleged that he was a "consumer" under the VPPA. The court reasoned that the VPPA only applies to consumers of audiovisual services. It held that signing up for the NBA's online newsletter did not make Salazar a "subscriber" of audiovisual "goods or services," as the newsletter was not considered an audiovisual service.
Luckily for Salazar and basketball fans in his shoes, when the case was appealed to the Second Circuit, the judges revived it.
Second Circuit Looks at Language
The Second Circuit examined whether Michael Salazar is a "subscriber of goods or services" under the VPPA by analyzing the statutory language and Salazar's relationship with the NBA.
The court looked to the text and structure of the VPPA to determine whether the term "goods or services" is limited to audiovisual content. Considering the VPPA’s language, the court noted that the definition of "consumer" as "any renter, purchaser, or subscriber of goods or services" is broad and not explicitly restricted to audiovisual materials. It reasoned that the use of expansive terms like "any" and "or" suggest an expansive application. The term "subscriber" does not require monetary payment, distinguishing it from "renter" or "purchaser."
The court then compared this with the definition of "video tape service provider,” which is also laid out by the VPPA. Since the text explicitly mentions "prerecorded video cassette tapes or similar audiovisual materials," the court reasoned that this indicated that Congress knew how to specify audiovisual content when intended. This comparison underscores that the consumer definition of "goods or services" is not inherently limited to audiovisual items.
Salazar alleged that he provided personal information, such as his email and IP address, to sign up for the NBA's online newsletter. In exchange, he received periodic updates, which the court found constituted a subscription. The court compared this to previous cases where providing personal information to access content was deemed sufficient for a subscription.
Court Considers Policy Arguments
The NBA put forth some policy arguments, expressing concern that a broad interpretation of "goods or services" could lead to anomalous results. It argued that under such an interpretation, a person who buys a non-audiovisual product, like a hammer, from a company could be considered a "consumer" under the VPPA if they later watch a free video on the company’s website. The NBA contended that this would be inconsistent with the statute's intent.
The court rejected these arguments, emphasizing that the statute's express terms of control and its broad language reflect Congress's intent to provide robust privacy protections. It emphasized that the VPPA was designed to protect privacy regarding video viewing information, which would support the assumption of a broad intent to safeguard personal data. This interpretation aligns with the legislative goal of preventing unauthorized disclosures, supporting a more inclusive understanding of "goods or services."
The court found that allowing disclosure of video viewing information in such scenarios would contradict the VPPA's goals. It concluded that the NBA’s hypothetical does not justify limiting the statute’s scope in a way that contradicts its plain meaning and purpose.
Viva la VPPA
Ultimately, the Second Circuit concluded that Salazar plausibly alleged he was a "subscriber of goods or services" from the NBA, as he exchanged valuable personal information for the newsletter, establishing a relationship beyond that of a casual website visitor. It ordered the district court’s judgment of dismissal to be vacated and the case be remanded for further proceedings.
The Second Circuit’s opinion also alluded to the broader implications of its ruling. Despite being enacted in 1988, the court pointed out that the VPPA remains highly relevant even in today’s modern digital context. Congress’s use of broad language in defining "consumer" indicates an intention for the VPPA to adapt to evolving technologies and consumption methods. The statute's privacy protections are designed to be robust, addressing the modern digital landscape where personal viewing information can be easily tracked and shared online.
We can probably read the court's opinion as sending a message that the VPPA is still relevant, even if it does need some clarification to make sure that it fits into a modern digital context. In an important way, the ruling has taken a big step to ensure that the protections envisioned by Congress are not rendered obsolete by technological advancements.
Related Resources:
- Protecting Customer Data (FindLaw's Learn About the Law)
- Social Media Privacy Laws (FindLaw's Learn About the Law)
- YouTube Wins Lawsuit Over 'Sneaky' Subscription Model (FindLaw's Federal Courts)
