When a “Consumer” is not a “Subscriber”– The Eleventh Circuit Court of Appeals Limits the Application of VPPA to Free Mobile Applications
Last Friday, the Eleventh Circuit addressed a question of first impression at the appellate level – namely, when is a user of a free mobile application a “subscriber” under the Video Privacy Protection Act (“VPPA”). In Ellis v. the Cartoon Network, Plaintiff downloaded defendant Cartoon Network’s free mobile app to watch video clips and shows. Without plaintiff’s knowledge or consent, the app monitored and tracked his viewing habits. The app did not collect plaintiff’s name or other contact or financial information; rather, it tracked him based upon a unique number identifier associated with his device. The info was then shared with third party marketing companies. Plaintiff filed a putative class action alleging the app violated VPPA. VPPA prohibits video providers from disclosing the personal information of a “consumer” to a third party, without prior consent, assessing a $2,500 statutory penalty per violation.
The critical question on appeal was whether the user qualified as a consumer under the statute. VPPA defines 'consumer' as “any renter, purchaser, or subscriber of goods or services from a video tape service provider." 18 U.S.C. § 2710(a)(1). Plaintiff maintained that he was a subscriber – and, therefore, a “consumer” under the statute – because he downloaded the app and watched shows. The district court agreed that plaintiff was a consumer, but dismissed the case because the app did not collect personal information.
On appeal, the Eleventh Circuit affirmed the dismissal on different grounds, holding the plaintiff was not a subscriber. It held that there must be a formalized relationship with the businesses, based upon whether the user/plaintiff:
signed up for or established an account;
provided any personal information, such as name, credit card information, address;
made payments for use of the app;
became a registered user of the business or app;
received a business-specific ID;
established an individual profile with the business;
signed up for periodic services or transmissions; and/or
established a relationship that would allow access to exclusive or restricted content.
The Court concluded that none of these factors existed in the underlying case. “Mr. Ellis simply watched video clips on the CN app, which he downloaded onto his Android smartphone for free.” It analogized the plaintiff’s use of a free app to casual internet browsing where a user bookmarks a website, but has no formal commitment or connection to the content provider.
The Ellis decision reflects a thoughtful approach of interpreting consumer protection statutes to emerging technologies in data privacy lawsuits, generally. It is, hopefully, a new trend in recognizing that both the business and the user’s involvement and expectations must be considered. Companies should integrate these concepts in designing their mobile apps – especially those that are monetized by freemium and in-app ads revenue, and weigh the importance and necessity of creating a “subscriber” relationship.