Facebook’s Beacon puts Blockbuster in a Pickle

Through Beacon, Blockbuster shared user’s rentals to their friends across the Facebook network. The only way to avoid having your rental records shared would be to use Facebook’s opt out, which is the exact opposite of the VPPA law which clearly says you must opt-in, in writing.

"The case against Blockbuster is quite straightforward," said James Grimmelmann, associate professor at the New York Law School. "I'm surprised that there haven't been lawsuits already in terms of Blockbuster. The one against Facebook requires a couple more steps.” 

Facebook’s Beacon ad service was released in early November and was considered the cornerstone of the new Facebook Ads platform. Beacon was designed to track user activity on more than 40 participating Web sites and to report activates to the Facebook user’s friends. The platform served multiple purposes. It gave advertisers viable marketing information. It sent targeted advertising to Facebook users and also added a means of giving “recommendations” for advertisers’ products to members of the Facebook network.

During the time period between the start of Beacon and the recent public outcry for privacy concerns, Blockbuster was in clear violation of the VPPA law due to passing movie choices without consent. Also the exchange of information took place on the backend of the site, far removed from the user’s sight and without the user’s knowledge.

If found to be in violation of the VPPA law, Blockbuster could face fines of up to $2,500 per each violation. Facebook’s culpability in the matter is less than clear. According to Grimmelmann, since Blockbuster and Facebook are partners than Blockbuster’s liability becomes Facebook’s responsibility as well.