The lawsuit, which alleged Netflix violated consumer-privacy laws, was settled for $9 million, forcing the company to restate its earnings by 14 percent.
In January, the company announced strong earnings and a surprising gain of 600,000 subscribers, its first significant gain in months. Following its PR disaster year of 2011, where its stock fell from over $300 to $60 per share, the company's stock has rebounded and now sits at over $120.
Netflix is expected to report a loss for 2012, thanks to its massive expansion plans into the UK, Ireland, Latin America, the Caribbean and its investment into original programming.
The lawsuit had alleged that since Netflix retains the records of what DVDs customers rent or stream for up to two years after they cancel, they are breaking the Video Privacy Protection Act, which was put into action in 1987. The Act specifically states that all "personally identifiable information must be destroyed within a year from the date that the information is no longer necessary for the purpose for which it was collected."
Netflix keeps the data in case a customer comes back after cancelling their subscription.
Written by: Andre Yoskowitz @ 12 Feb 2012 21:36
