Blockbuster connection prompts Facebook lawsuit

PHYSICAL: Social-networking site violated privacy laws, members allege

By Danny King -- Video Business, 10/12/2009

OCT. 12 | PHYSICAL: Facebook is being sued by three Dallas residents for what they say is the social-networking site's role in the illegal disclosure of which DVD titles Facebook users are renting on Blockbuster's Web site.

Facebook is violating the Video Privacy Protection Act by pulling customer-rental information off of Blockbuster's Web site before giving Facebook users the chance to opt-out of the option, according to the class-action claim filed by Cathryn Elaine Harris, Mario Herrera and Maryam Hosseiny. Through Facebook and its technology partner Beacon, Blockbuster promotes certain films to Facebook users by telling them which DVDs their friends are ordering on Blockbuster Online, according to the case.

In April 2008, the plaintiffs sued Blockbuster, saying the chain violated their privacy by releasing her DVD rental information without permission. The plaintiffs cite a 1987 Supreme Court ruling that prohibits video stores from releasing customer rental and sales histories.

The Blockbuster-Facebook agreement "constituted a civil conspiracy, that is a combination by two or more persons to accomplish unlawful purpose or to accomplish unlawful purpose by unlawful means," according to the class-action claim. The claimants are seeking unspecified punitive damages from Facebook.

"The suit is without merit and we will fight it vigorously," Facebook said in a statement today.

In late-2007, Facebook founder Mark Zuckerberg issued an apology for how the Beacon system was launched, saying the company "made a lot of mistakes building this feature," according to the lawsuit. Although Facebook changed the marketing feature into an "opt-in" procedure for customers instead of an "opt-out" one, the change didn't rectify the transfer of customer information up to that point, according to the claim.

Blockbuster representatives declined to comment, saying the company's not a party to the class-action suit.

In November 2007, Facebook said 44 Web sites, including Blockbuster.com, would work with the social-networking site and its Beacon partner in its effort to socially distribute information, including consumer preferences.

Five months later, the plaintiffs in the class-action lawsuit filed a claim against Blockbuster. The court handling that case was switched last January. Court records show no documents have been filed on the claim since then, but Blockbuster in July requested that the parties take their claims to arbitration, according to the class-action suit.