Is Netflix’s Facebook App Illegal in U.S.? 5 Things To Know About Strange Law Debacle

Ever since Facebook announced its Open Graph developer's tool -- the service that allows its users to share web activity seamlessly through Facebook apps -- most major brands in the media industry have tried to embrace the new technology. Hundreds of Facebook apps currently allow members of the social network to seamlessly publish activity across the web. Music services such as Spotify and video streaming services such as Hulu have become a staple of most people's Facebook News Feed.

That's why it's strange for Netflix, a company that makes up for 32 percent of U.S. bandwidth usage, to refrain from releasing a Facebook app. The stranger part is that the company has actually released a Facebook app everywhere but the U.S. because of an ambiguous privacy law created in the late 1980s.

Unfortunately, we will not be offering this feature in the U.S. because a 1980's law creates some confusion over our ability to let U.S. members automatically share the television shows and movies they watch with their friends on Facebook, said Michael Drobac, director of Government Relations at Netflix in a blog post. We'll continue to look at these issues and find ways to bring you the easy, convenient and quality experiences you have come to expect, including ways to automatically share with your friends on Facebook.

The legal issue that's stifled Netflix can be complicated, especially because it deals with a mutli-billion dollar industry and some of the largest internet-based brands in the country. For those that want an easily digestible recap of the legal controversy, we've sought out the five most important things to know about why Neflix has not released a U.S. version of its Facebook app. Here they are:

1. Why Can't Netflix Create a U.S. Version Of Its Facebook App

An outdated privacy law from the 1980s, Video Privacy Protection Act (VPPA), is preventing Netflix from releasing a Facebook app in the U.S. The law is meant to protect consumers' privacy, although the proliferation of the Internet has caused the law to become outdated, especially because it was created with video rental stores, such as Blockbuster, in mind. Lawmaker are currently working to update the VPPA, which was passed in 1988.

2. What is the Video Privacy Protection Act (VPPA)?

The Video Piracy Protection Act (VPPA) was developed after a freelance writer for the Washington City Paper convinced a video store clerk to give him then-Supreme Court nominee Robert Bork's video rental history. Although there was no revealing information in the rental history, the Washington City Paper published the records anyway. Congress  passed the law after facing pressure to protect people's video rental privacy. By passing the VPPA, Congress made a video tape service provider liable up to $2500 in damages if rental information was published outside of the ordinary course of business.

3. Did Congress Consider The Future Of Technology?

Congress took into consideration that video rentals may not always be the type of media that's rented. The wording of the law is holds any video tape service provider would be held accountable for revealing rental records. In the law's writing, video tape service provider is defined as a person engaged in the business, in or affecting interstate or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials.... Since the definition is over-arching, some companies, including Netflix, are worried that the law could be interpretted to hold them accountable for doing something as simple as sharing video rental information on a social network such as Facebook.

4. Why Do Other Streaming Video Services, Such As Hulu, Have Facebook Apps?

It's unclear why other video streaming services such as Hulu have Facebook apps and Netflix doesn't. One glaring difference between most other video rental services such as Hulu or Amazon is that Netflix still offers physical copies of the videos it rents. Lawyers may be able to defend other businesses by arguing the wording in the VPPA is specifically made for phsyical copies of rented media. Unfortunately, Netflix is unable to make the same argument because it still rents physical discs. Hulu representatives declined to speak about the issue when CNN Money reached out for a comment.

5. How Can I Encourage Congress to Update The Law

If you're interested in reaching out to Congress about the law, your best bet is to contact them directly. You can find the contact information of your representatives by visiting Congress website. Alternatively, Netflix has created a campaign that will urge Congress to update the ambiguous law. To participate in the Netflix campaign, visit the website and follow the direction about how you can email Congress.

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