Casual website visitor who watched videos was not protected under the Video Privacy Protection Act

A recent federal court decision from the Southern District of New York sheds light on what is required to be considered a “consumer” who is protected under the Video Privacy Protection Act (VPPA). The court held that a website visitor who merely visited a website once in awhile to watch videos — without establishing a more “deliberate and durable” affiliation with the website — was not a “subscriber” to the website’s services and thus the VPPA did not prohibit the alleged disclosure of information about the website visitor’s viewing habits.

Defendant was a television network that maintains a website offering video clips and episodes of many of its television shows. The website also incorporated Facebook’s software development kit which, among other things, let visitors log into websites using their Facebook credentials. This mechanism relied on cookies. If a person had chosen to remain logged into Facebook by checking the “keep me logged in” button on Facebook’s homepage, the relevant cookie would continue to operate, regardless of what the user did with the web browser. Plaintiff alleged that this mechanism caused AMC to transmit information to Facebook about the video clips she watched on the AMC site.

Plaintiff sued under the VPPA. Defendant moved to dismiss, arguing that plaintiff lacked standing under the statute and that she was not a protected “consumer” as required by the statute.

The court found that plaintiff had standing. It rejected defendant’s argument that a VPPA plaintiff must allege some injury in addition to asserting that defendant had violated the statute. “It is true . . . that Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.” But Congress “can broaden the injuries that can support constitutional standing.”

The court next looked to whether plaintiff was a “consumer” protected under the statute. The VPPA defines the term “consumer” to include “any renter, purchaser, or subscriber of goods or services from a video tape service provider.” Absent any assertion that plaintiff was a renter or purchaser of AMC’s goods, the parties and the court focused on whether she was a “subscriber” (a term not defined in the statute).

Because plaintiff’s allegations failed to establish a relationship with defendant sufficient to characterize her as a subscribers of defendant’s goods or services, the court dismissed the VPPA claim with leave to amend. It observed: “Conventionally, ‘subscription’ entails an exchange between subscriber and provider whereby the subscriber imparts money and/or personal information in order to receive a future and recurrent benefit, whether that benefit comprises, for instance, periodical magazines, club membership, cable services, or email updates.” In this case, “[s]uch casual consumption of web content, without any attempt to affiliate with or connect to the provider, exhibit[ed] none of the critical characteristics of ‘subscription’ and therefore [did] not suffice to render [plaintiff] a subscriber of [defendant’s] services.”

Austin-Spearman v. AMC Network Entertainment LLC, 2015 WL 1539052 (S.D.N.Y. April 7, 2015)

Evan Brown is an attorney in Chicago helping clients manage issues involving technology and new media.

Complaint site does not have to identify its users

Petitioner filed an action in New York state court seeking to compel PissedConsumer.com to disclose the identity of the person or persons who posted certain statements to the site. These statements criticized petitioner for allegedly failing to fulfill an advertising promise to give the user a $500 gas card. The anonymous user went on to complain that petitioner “will forget about you and … all the promises they made to you” once “you sign on the dotted line.”

The trial court denied the petition to compel PissedConsumer.com to turn over the names of its users. Petitioner sought review with the Appellate Division. On appeal, the court affirmed.

It held that the lower court properly denied the petition since petitioner failed to demonstrate that it had a meritorious cause of action as required to obtain pre-action discovery:

Nothing in the petition identifies specific facts that are false and when the statements complained of are viewed in context, they suggest to a reasonable reader that the writer was a dissatisfied customer who utilized respondent’s consumers’ grievance website to express an opinion. Although some of the statements are based on undisclosed, unfavorable facts known to the writer, the disgruntled tone, anonymous posting, and predominant use of statements that cannot be definitively proven true or false, supports the finding that the challenged statements are only susceptible of a non-defamatory meaning, grounded in opinion.

The court seemed to recognize the importance of anonymous speech, and that one must not lightly cast aside its protections. If you’re going to go after an online critic, best have a cause of action that you can actually plead.

Woodbridge Structured Funding, LLC v. Pissed Consumer, — N.Y.S.2d —, 2015 WL 686383, (February 19, 2015)

Evan Brown is an attorney in Chicago helping clients with technology, intellectual property and new media issues.

internetcases turns 10 years old today

Ten years ago today, somewhat on a whim, yet to fulfill a need I saw for discussion about the law of the internet in the “blogosphere” (a term we loved dearly back then), I launched internetcases.

What started as a one-page handwritten pamphlet that I would mimeograph in the basement of my one-bedroom apartment and then foist upon unsuspecting people on street corners has in ten years turned into a billion dollar conglomerate and network. internetcases is now translated into 7 languages daily and employs a staff of thousands to do the Lord’s work fighting Ebola and terrorism on 4 continents. Or it’s a WordPress install on some cheap GoDaddy space and I write when I can.

All seriousness aside, on this 10th anniversary, I want to sincerely thank my loyal readers and followers. Writing this blog has been the single most satisfying thing I’ve done in my professional life, and I am immensely grateful for the knowledge it has helped me develop, the opportunities for personal brand development it has given (speaking, press, media opportunities), but most of all, I’m grateful for the hundreds of people it has enabled me to connect with and get to know.

Blogging (and the web in general) has changed a lot in 10 years. And the legal issues arising from the internet continue to challenge us to stretch our thinking and amp up our powers of analysis. It’s great to have a platform on the web from which to share news and thoughts about the role that technology plays in shaping our legal rules and our culture.

Thanks all.

Best practices for providers of goods and services on the Internet of Things

Today the United States Federal Trade Commission issued a report in which it detailed a number of consumer-focused issues arising from the growing Internet of Things (IoT). Companies should pay attention to the portion of the report containing the Commission’s recommendations on best practices to participants (such as device manufacturers and service providers) in the IoT space.

The Commission structured its recommendations around four of the “FIPPs” – the Fair Information Practice Principles – which first appeared in the 1970s and which inform much of the world’s regulation geared to protect personal data. The recommendations focused on data security, data minimization, notice and choice.

DATA SECURITY

IoT participants should implement reasonable data security. The Commission noted that “[o]f course, what constitutes reasonable security for a given device will depend on a number of factors, including the amount and sensitivity of data collected and the costs of remedying the security vulnerabilities.” Nonetheless, companies should:

  • Implement “security by design”
  • Ensure their personnel practices promote good security
  • Retain and oversee service providers that provide reasonable security
  • Implement “defense-in-depth” approach where appropriate
  • Implement reasonable access control measures
  • Monitor products in the marketplace and patch vulnerabilities

Security by Design

Companies should implement “security by design” into their devices at the outset, rather than as an afterthought by:

  • Conducting a privacy or security risk assessment to consider the risks presented by the collection and retention of consumer information.
  • Incorporating the use of “smart defaults” such as requiring consumers to change default passwords during the set-up process.
  • Considering how to minimize the data collected and retained.
  • Testing security measures before launching products.

Personnel Practices and Good Security

Companies should ensure their personnel practices promote good security by making security an executive-level concern and training employees about good security practices. A company should not assume that the ability to write code is equivalent to an understanding of the security of an embedded device.

Retain and Oversee Service Providers That Provide Reasonable Security

The Commission urged IoT participants to retain service providers that are capable of maintaining reasonable security and to oversee those companies’ performance to ensure that they do so. On this point, the Commission specifically noted that failure to do so could result in FTC law enforcement action. It pointed to a recent (non IoT) case in which a medical transcription company outsourced its services to independent typists in India who stored their notes in clear text on an unsecured server. Patients in the U.S. were shocked to find their confidential medical information showing up in web searches.

The “Defense-in-Depth” Approach

The Commission urged companies to take additional steps to protect particularly sensitive information (e.g., health information). For example, instead of relying on the user to ensure that data passing over his or her local wireless network is encrypted using the Wi-Fi password, companies should undertake additional efforts to ensure that data is not publicly available.

Reasonable Access Control Measures

While tools such as strong authentication could be used to permit or restrict IoT devices from interacting with other devices or systems, the Commission noted companies should ensure that they do not unduly impede the usability of the device.

Monitoring of Products and Patching of Vulnerabilities

Companies may reasonably decide to limit the time during which they provide security updates and software patches, but must weigh these decisions carefully. IoT participants should also be forthright in their representations about providing ongoing security updates and software patches to consumers. Disclosing the length of time companies plan to support and release software updates for a given product line will help consumers better understand the safe “expiration dates” for their commodity internet-connected devices.

DATA MINIMIZATION

Data minimization refers to the concept that companies should limit the data they collect and retain, and dispose of it once they no longer need it. The Commission acknowledged the concern that requiring data minimization might curtail innovative uses of data. A new enterprise may not be able to reasonably foresee the types of uses it may have for information gathered in the course of providing a connected device or operating a service in conjunction with connected devices. Despite certain concerns against data minimization, the Commission recommended that companies should consider reasonably limiting their collection and retention of consumer data.

The Commission observed how data minimization mitigates risk in two ways. First, the less information in a database, the less attractive the database is as a target for hackers. Second, having less data reduces the risk that the company providing the device or service will use the information in a way that the consumer does not expect.

The Commission provided a useful example of how data minimization might work in practice. It discussed a hypothetical startup that develops a wearable device, such as a patch, that can assess a consumer’s skin condition. The device does not need to collect precise geolocation information in order to work, but it has that capability. The device manufacturer believes that such information could be useful for a future product feature that would enable users to find treatment options in their area. The Commission observed that as part of a data minimization exercise, the company should consider whether it should wait to collect geolocation information until after it begins to offer the new product feature, at which time it could disclose the new collection and seek consent. The company should also consider whether it could offer the same feature while collecting less information, such as by collecting zip code rather than precise geolocation. If the company does decide it needs the precise geolocation information, the Commission would recommend that the company provide a prominent disclosure about its collection and use of this information, and obtain consumers’ affirmative express consent. And the company should establish reasonable retention limits for the data it does collect.

As an aspect of data minimization, the Commission also discussed de-identification as a “viable option in some contexts” to help minimize data and the risk of potential consumer harm. But as with any conversation about de-identification, the Commission addressed the risks associated with the chances of re-identification. On this note, the Commission referred to its 2012 Privacy Report in which it said that companies should:

  • take reasonable steps to de-identify the data, including by keeping up with technological developments;
  • publicly commit not to re-identify the data; and
  • have enforceable contracts in place with any third parties with whom they share the data, requiring the third parties to commit not to re-identify the data.

This approach ensures that if the data is not reasonably de-identified and then is re-identified
in the future, regulators can hold the company responsible.

NOTICE AND CHOICE

Giving consumers notice that information is being collected, and the ability to make choices as to that collection is problematic in many IoT contexts. Data is collected continuously, by many integrated devices and systems, and getting a consumer’s consent in each context might discourage use of the technology. Moreover, often there is no easy user interface through which to provide notice and offer choice.

With these concerns in mind, the Commission noted that “not every data collection requires choice.” As an alternative, the Commission acknowledged the efficacy of a use-based approach. Companies should not be compelled, for example, to provide choice before collecting and using consumer data for practices that are consistent with the context of a transaction or the company’s relationship with a consumer. By way of example, the Commission discussed a hypothetical purchaser of a “smart oven”. The company could use temperature data to recommend another of the company’s kitchen products. The consumer would expect that. But a consumer would not expect the company to disclose information to a data broker or an ad network without having been given notice of that sharing and the ability to choose whether it should occur.

Given the practical difficulty of notice and choice on the IoT, the Commission acknowledged there is no one-size-fits all approach. But it did suggest a number of mechanisms for communications of this sort, including:

  • Choices at point of sale
  • Tutorials (like the one Facebook uses)
  • QR codes on the device
  • Choices during setup
  • Management portals or dashboards
  • Icons
  • Out-of-band notifications (e.g., via email or text)
  • User-experience approach – “learning” what the user wants, and adjusting automatically

Conclusion

The Commission’s report does not have the force of law, but is useful in a couple of ways. From a practical standpoint, it serves as a guide for how to avoid engaging in flagrant privacy and security abuses on the IoT. But it also serves to frame a larger discussion about how providers of goods and services can and should approach the innovation process for the development of the Internet of Things.

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