NEW YORK – A U.S. court approved the preliminary agreement which states that Netflix will have to pay $9 million (€7.32 million) for a class action lawsuit that accuses the company of violating consumers’ privacy laws.
“The agreement that was reached last February has a more favorable result compared to other recent cases on consumer privacy including that of Google and Facebook” said U.S. District Judge Edward Davila, of San Jose, California.
The judge also confirmed that the number of customers and former customers nationwide who subscribed to Netflix reached 10 million.
Netflix subscribers accused the company of violating the law of Privacy Protection1988 by keeping record of the internet videos they had seen at least two years after they cancelled their service subscription.
Netflix said they used the data for their marketing and advertising strategies. However, without the consent of their previous customers, they violated a legal requirement that only allows them to use personally identifiable information a year after the original purpose for which it was collected.
Prosecutors said that most of the people they spoke with were extremely uncomfortable that the California company had kept records of the videos they watched as well as their credit card numbers longer than they were allowed.
The agreement calls for Netflix to decouple the history of other data users one year the service subscription was canceled. The money will be used to educate consumers and regulators in protecting privacy.
The lawsuit was initiated by former Netflix subscribers and residents of Virginia, Jeff Milans and Peter Comstock.
The hearing to decide the final judgment will be on December 5.