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VPPA Case Means Panic Mode for App Developers

By Jonathan R. Tung, Esq. on May 04, 2016 | Last updated on March 21, 2019

The First Circuit just handed down a decision that will send app developers panic mode. The federal court has ruled that persons who surrender information without opting out can form the basis of a Video Privacy Protection Act suit against the companies who share that information with third parties.

And, unless you've been living on another planet, this has implications for pretty much all companies that collect information.

What's in a word?

Much of the legal broohaha centers on what the exact definition of "subscriber" is.

Back in the 1980s when the VPPA was first enacted, the Act was intended to penalize any "video tape service provider[s] who knowingly disclose ... personally identifiable information concerning any consumer," with 'consumer' meaning "any renter, purchaser, or subscriber." And if you're wondering what "subscriber" means, then you're on the right track.

For reasons too complicated to be detailed here, the VPPA became the go-to federal statute applied to privacy issues. This, despite the fact that VHS and tapes are obsolete, and despite the fact that most persons consume their entertainment via mobile devices. Band-Aid approaches have been applied in order to give the Act a bit more of a "today" kind of feel.

Naturally, cases have often wrangled bitterly over the definition of key terms in the VPPA, including "subscriber." In general, however, VPAA suits brought against companies by persons who don't pay a fee but nonetheless claim unlawful sharing of their personally identifiable information (PII) have generally failed to stick. The "subscriber" issue has been at or near the heart of most of these cases.

Yershov and Gannett

The Gannett Company, which owns USA Today, shared information with Adobe which allowed the former Palm maker to track plaintiff-Yershov (and others like him) every time and every place he logged onto his device to watch videos via the downloaded USA Today app. He paid no money and didn't "opt-in" for disclosures. Yershov brought a suit claiming VPPA violations.

The circuit court ended up reversing the lower court dismissal, not on the issue of PII. Both courts agreed that being able to track someone down to within a few feet of where they might actually be standing via GPS coordinates sufficiently met the test of PII. But the court reversed the case on the issue of "subscriber."

Specifically, the circuit balked at the notion that when Congress enacted the VPPA, it only envisioned the word "subscriber" and the subsequent protections to apply only to those persons who paid a monetary compensation. Of Yershov, the circuit said this:

"While he paid no money, access was not free of a commitment to provide consideration in the form of that information, which was of value to Gannett. And by installing the App on his phone, thereby establishing seamless access to an electronic version of USA Today, Yershov established a relationship with Gannett that is materially different from what would have been the case had USA Today simply remained one of millions of sites on the web that Yershov might have accessed through a web browser."

What does this mean? Take someone's info and share it with a third party? Be prepared for a potential lawsuit.

And considering that's how a good chunk of the current economy runs, it could be good times for First Circuit class action attorneys. But according to Silicon Valley's "most hated lawyer," it means "panic mode" for app developers.

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