In an unfolding legal discourse with significant implications for data-sharing compliance, the US Courts of Appeals for the Sixth Circuit and the Seventh Circuit have issued divergent rulings concerning the definition of a “consumer” under the Video Privacy Protection Act (VPPA). This recent circuit split has triggered pronounced uncertainties for businesses managing video content in relation to online user data.
The VPPA, originally enacted to protect video rental records, imposes restrictions on the “knowingly” unlawful disclosure of “personally identifiable information” by a “video tape service provider” (VTSP), as detailed by the statute on Bloomberg Law. Central to the current legal debates is whether the term “consumer” applies strictly to those consuming audiovisual materials or broadly encompasses any “goods and services” provided by a VTSP.
In Salazar v. Paramount Global, the Sixth Circuit sided with the defendants, interpreting that “consumer” applies exclusively to subscribers of goods akin to “video cassette tapes or similar audiovisual materials.” As reported, this view suggests that merely signing up for a newsletter does not equate to being a consumer of a VTSP.
In contrast, the Seventh Circuit, and previously the Second Circuit, have adopted a broader view. They argue that the VPPA’s definition of “consumer” without specifying a limitation on goods and services underscores its applicability across diverse consumer-product interfaces, as seen in Gardner v. Me-TV.
The implications of this divide are substantial. If upheld, the Seventh and Second Circuit rulings would considerably expand VPPA applicability, enhancing compliance risks for a broader range of industries leveraging video content embedded with tracking technologies like “Meta pixels.” Notably, this expands potential VPPA claims across various consumer interactions, even when videos are ancillary to the primary transaction.
The outcomes of pending petitions for rehearing en banc and potential U.S. Supreme Court review could redefine the reach of the VPPA. Until such clarity is achieved, businesses should actively reassess their compliance frameworks, particularly focusing on obtaining comprehensive consent for audiovisual data practices to mitigate exposure to litigation.
This ongoing jurisdictional uncertainty calls for a heightened diligence in data privacy practices within corporations, particularly as the digital landscape continues to evolve rapidly, necessitating adaptations in regulatory compliance strategies.