FTC’s Privacy Worries Prompt Netflix to Cancel Contest

Privacy concerns voiced by the Federal Trade Commission and a lawsuit from a closeted lesbian have prompted Netflix (NFLX) to cancel a contest to improve its movie recommendations.

On the official Netflix blog, Chief Product Officer Neil Hunt wrote that the company has “decided to not pursue the Netflix Prize sequel” that was announced in August. The original Netflix Prize awarded $1 million to a team of outside researchers that improved Netflix’s recommendations system by 10 percent.

The firm KamberLaw LLC filed a lawsuit in December on behalf of a woman alleging that the Netflix contest had violated California laws and the federal Video Protection Privacy Act. In its December story on the suit, Wired explained the problem with the contests: The data given to participants in the first contest included movie ratings, dates and unique subscriber numbers.

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