Today the Supreme Court will hear arguments in a major case pitting privacy advocates against media companies. By any measure, Salazar v. Paramount Global is a blockbuster case in the making. At issue is the use of viewing habits by companies offering free subscriptions and material to the public. These companies make money by then using that history for tailored marketing programs. Michael Salazar is arguing that a Blockbuster-era law should prevent such sharing of his viewing history, a ruling that would have a massive impact on media and entertainment companies.
Salazar involves a law passed 40 years ago after a controversy during the confirmation hearings of Robert Bork, who was nominated by President Ronald Reagan. The press and pundits unleashed an unrelenting campaign against the conservative, including the Washington City Paper releasing his list of 146 movies rented from a video store. Congress moved to stop the abuse and passed the Video Privacy Protection Act to bar such disclosures.
Now, Michael Salazar is arguing that his free digital subscription for 247Sports.com, which is owned by Paramount Global, should also prevent the company from sharing his viewing habits with marketers. The case could have sweeping impacts on media and entertainment companies, which make much of their revenue through tailored marketing pitches based on such information.
The Video Privacy Protection Act (“VPPA”) bars a “video tape service provider” from “knowingly disclos[ing], to any person, personally identifiable information concerning any consumer of such provider.” 18 U.S.C. § 2710(b)(1). A “consumer” defined as a “subscriber of goods or services from a video tape service provider.” Id. § 2710(a)(1). The act further defines “personally identifiable information” as including information that “identifies a person as having requested or obtained specific video materials or services from a video tape service provider.” Id. § 2710(a)(3).
On one level, the spirit of the Act is to protect the privacy of citizens in watch they choose to watch in their private lives. That is why privacy groups have rallied around the case. According to polls, over seven in ten Americans have concerns that they have little to no control over what companies do with their data.
Conversely, the companies argue that this is a free service and that marketing is how these companies make such material available without charge to the public.
Paramount is arguing for a narrow construction of the statute. It notes that “consumer” is a “renter, purchaser, or subscriber of goods or services” from a “video tape service provider.” 18 U.S.C. 2710(a)(1). It argues that Salazar is not a “consumer” because he did not “rent[], purchase[], or subscribe[]” to the delivery of any “video cassette tapes or similar audio visual materials.” 18 U.S.C. 2710(a)(1) and (4).
Salazar insists that he did subscribe when he signed up for a free, written email newsletter. However, the company argues that the newsletter is not a “video cassette tape[] or similar audio visual material[],” ibid., so he is not a “consumer” under the statute.
It is portraying the case as a distortion of a now dated law: “The VPPA is a Blockbuster-era statute barring the non-consensual disclosure by video rental stores of the rental history of individual patrons. Salazar seeks to transmogrify it into a prohibition against targeted advertising on the Internet.”
Like many sites, 247Sports allows access outside of a paywall by making revenue through advertising. While many consumers do not like their viewing history shared, they also do not like the increasing costs of having to pay for access to games and videos. It is a tradeoff that the lower courts felt was permissible in rejecting Salazar’s claims.
This is a tough case of statutory interpretation in seeking to apply an older statute to new media conditions and practices.
Courts have found various flaws in Salazar’s claims ranging from claiming to be a “consumer” within the meaning of the VPPA to whether Paramount is a “video tape service provider” or whether the information is “personally identifiable.”
If subscribing to a free newsletter is the same as subscribing to actual audiovisual content, the case could deliver a massive blow to media revenue streams.
Ultimately, Congress could step in to tweak the law if the Court rules for Salazar. When the Court accepts a case, there is a higher likelihood that it will reverse the underlying opinion. However, it only takes four justices to accept a case and this Court tends to narrowly construe such laws. The countervailing issue here is that the Act was designed with the stated purpose of protecting privacy.
I teach “legisprudence” theories in my torts and Supreme Court classes in how courts interpret statutes with “gaps” or “ambiguities.”
Some would argue that a court should gravitate toward the narrow textual meaning given the sweeping impact of a broader interpretation. Figures such as Judge Frank Easterbrook argued for upholding the “deal” of legislation in strictly interpreting such laws by not gap-filling. Instead, the court can leave it to Congress to resolve ambiguities as the branch accountable to voters.
Another approach, advocated by Professor Jonathan Macey, would apply the “public-regarding purpose” of the law — fill in the gap or ambiguity by reference to the stated “public-regarding purpose” of the law. In this case, the public-regarding purpose is privacy.
The Court often gets sticker shock in adopting broader interpretations that could impact whole industries in such a transformative way. It much prefers to defer to Congress on such trade-offs. Yet, rather than letting the Sixth Circuit opinion in favor of Paramount stand, four justices decided that they wanted to deal with this question. It could prove to be a close case.