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Revisiting the Legality of Password Sharing as Netflix Begins to Crack Down

Male hand holding TV remote control.
By Joseph Fawbush, Esq. | Last updated on

According to Comcast's recently released 2020 network data, streaming video remains – by far – the largest use of the internet in the home. This is true despite more people than ever using video conferencing technology while working from home. On the other hand, there's not that much to do anymore after work but see what's on Netflix, right?

Netflix, unsurprisingly, is aware of how much people rely on video streaming services. Despite historically being incredibly lenient on password sharing, Netflix is now testing a new policy that prompts some people to sign up for their own account if they do not live in the same household as the registered owner. "If you don't live with the owner of this account, you need your own account to keep watching" the prompt warns.

It Is Actually a Federal Crime - Sort of

You probably figured out already that Netflix has a user agreement prohibiting sharing your password with everyone. Somewhat surprisingly, there is a federal law that prohibits password sharing, as well. The Computer Fraud and Abuse Act (CFAA) makes it a federal crime to share passwords, although it's unlikely that the FBI will raid your home because you are still on your ex's account despite breaking up several months ago. Still, in 2016, the Ninth Circuit held that in certain cases sharing passwords did violate the CFAA. SCOTUS declined to take up the issue on appeal. 

The feds have never prosecuted anyone for sharing a streaming service platform password, however, and courts have never explicitly addressed the issue of whether doing so violates the CFAA.

A New Impetus to Stop Password Sharing?

A much more likely scenario than federal prosecution is Netflix simply requiring you to pay for your own account moving forward. While streaming services have historically turned a blind eye to password sharing, in part believing it to be an advertising tool, in 2019 Disney and Charter Communications began enforcing its restriction on password sharing. Now, it appears Netflix is experimenting with the idea, as well.

With Disney+ and Netflix apparently cracking down on password sharing, we may see a renewed attempt to get more paid subscribers with their own accounts. Meanwhile, if you have inadvertently violated federal law (maybe) by getting your parents' Netflix password, it's still not something to lose sleep over. Not being able to watch your favorite shows may be a separate issue entirely.

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