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Websites are facing lawsuits alleging that the information collected and transmitted about viewers of their video content violates the Video Privacy Protection Act (VPPA), a 1988 law originally aimed at prohibiting video rental companies from disclosing the video tape rental records of consumers. In recent years, federal courts have held that the law applies to all video, regardless of technical format. Even more recently, plaintiffs are using the law to apply to website operators that host streaming video.

The Video Privacy Protection Act

The VPPA prohibits a video tape service provider from knowingly disclosing, to any person, personally identifiable information concerning any consumer of the provider without the consumer’s informed, written consent. VPPA provides for a private right of action, including statutory damages not less than $2,500 per consumer plus attorneys’ fees. Ouch.

Personally identifiable information for purposes of the VPPA means information that identifies a person as having requested or obtained specific video materials or services from a video tape service provider, i.e., any information that ties an identifiable viewer to a video.

Service providers to which the law applies are also subject to record destruction requirements. Personally identifiable information must be destroyed as soon as practicable, but not later than one year from the date that the information is no longer necessary for the purpose for which it was collected and there are no pending court orders or requests from law enforcement.

Risks for Streaming Video

The statutory damages prescribed in the VPPA, combined with the award of attorneys’ fees, have led plaintiffs’ attorneys to argue for the statute’s application to streaming video. Courts have generally obliged, finding that the VPPA protects viewers of videos regardless of the medium of transmission. Plaintiffs have then sought to prove violations of the VPPA by arguing that by sharing usage statistics with data analytics vendors such as comScore, streaming video providers are disclosing personally identifiable information in violation of the statute. How much consumer information may be permissibly shared with analytics vendors under the law and in what form are far from settled legal issues, but the key question in each case is, can the data shared with third parties, taken together, personally identify viewers with their video choices?

In the most recent ruling on the applicability of the VPPA to streaming video, a federal judge in Seattle ruled that the sharing of anonymous data alone, in the form of a unique serial number to a streaming video player, does not violate the VPPA, but if shared along with other correlative data capable of personally identifying viewers in combination, the provider could potentially be liable. Similarly, federal judges have held that other anonymous unique identifiers, including mobile device IDs or cloud service IDs, even when combined with video viewing history, do not personally identify users and therefore their transmission is not a violation. However, courts have also suggested that other login information, such as a social media ID provided through a “Like” button on a website, may constitute personally identifiable information subject to the VPPA. A provider may also be liable for information transmitted in cookies placed on its website by third parties, even if the provider cannot read or control the contents.

Although large media companies are the obvious targets for plaintiffs’ lawyers, with potentially millions of separate violations in the case of the largest services, any website or other online service that provides video content to consumers is potentially subject to legal risks under the VPPA. Companies whose websites provide even incidental video content should review their data collection and retention practices for risks that third parties with access to user data may be able to tie personally identifiable information to video viewing history. Some questions to consider include the following:

• Is personally identifiable information collected when a user views hosted video content?

• Is personally identifiable information passed to third-party advertising services or analytics vendors?

• Do analytics vendors or advertising services have direct access to user information? Is that information capable of being correlated with video viewing history?

• Is video viewing history stored in cookies? If so, is that information shared with advertisers or otherwise persistent across third-party services?

• Are any social media–sharing features, such as a “Like” button, presented with video content?

By Dionne Lomax

On October 21, 2014, the U.S. District Court for the Southern District of Ohio granted Defendants’ motion for summary judgment, holding that Premier Health Partners (“Premier”) and its affiliate hospitals, Atrium Health Systems, Catholic Health Initiatives, MedAmerica Health Systems, Samaritan Health Partners, and Upper Valley Medical Center (collectively, “Defendants”), operating under a joint operating agreement (“JOA”), constituted a single entity incapable of conspiring in violation of Section 1 of the Sherman Act. The Medical Center at Elizabeth Place v. Premier Health Partners, et al., Case No. 3:12-cv-26 (S.D. Ohio, Oct. 21, 2014).

Plaintiff, a 26-bed acute-care hospital in Dayton, Ohio, alleged that Defendants orchestrated a per se illegal group boycott to deny it access to the physicians, physician referrals, and managed care contracts it needed to compete. Defendants moved for summary judgment, arguing that their actions under the JOA constituted conduct by a single entity, and thus, under Copperweld Corp. v. Independent Tube Corp. (“Copperweld”), 467 U.S. 752 (1984), they were incapable of conspiring in violation of Section 1 of the Sherman Act, which applies only to joint conduct.

Copperweld is a seminal antitrust decision in which the Supreme Court held that a parent corporation and its wholly owned subsidiary are not legally capable of conspiring with each other under Section 1 of the Sherman Act. The Copperweld doctrine has subsequently been extended to other arrangements beyond a parent and its wholly owned subsidiary, including partially owned subsidiaries, partial ownership arrangements, joint venture arrangements, and joint operating agreements between entities that are not under common ownership of a single parent.

Plaintiff argued that Defendants are not a single entity and not protected under Copperweld because they (1) do not share ownership assets and remain independently owned and operated; (2) are actual and potential competitors (as evidenced by comments of senior management related to the issues of separateness and the competitive dynamic among the hospitals); (3) made statements in public disclosures that support a finding that Defendants are separate (e.g., statements in IRS Form 990s that the JOA members agreed to jointly operate separate healthcare systems pursuant to the terms of the JOA, and statements in bond documents that affiliate hospitals were separately responsible for their assets and liabilities); and (4) conducted themselves in the market as if they were separate (e.g., entering into contracts with payers under the affiliate hospital’s name rather than under Premier’s name).

The District Court disagreed. Citing the Supreme Court’s decisions in Copperweld and American Needle, Inc. v. National Football League, 560 U.S. 183 (2010), the court declined to use a bright-line rule regarding asset ownership and the corporate form to assess the parties’ conspiratorial capacity, focusing instead on the economic realities and how the parties actually functioned and operated in the market.

According to the court, “contractual control is sufficient to demonstrate that the Defendants are a single entity.” Thus, the fact that the JOA participants did not share ownership of assets did not cause the court to deem them separate entities, because the participants delegated operational, strategic, and financial control to Premier under the Alliance Agreement, much like the hospitals inHealth America Pennsylvania, Inc. v. Susquehanna Health System, 278 F. Supp. 2d 423 (M.D. Pa. 2003) (where the court deemed the hospitals a single economic actor under Copperweld). The court also gave little credence to statements in certain documents regarding competition among JOA participants. The court did not believe the Defendants could be considered “actual or potential competitors” because they were not pursuing separate economic interests. The court defined the Defendants as “a single, unified economic unit” because “all of the money goes to the bottom line – the Network Net Income” and the Defendants’ “actions are guided or determined by one corporate consciousness.” Similarly, the statements in IRS and bond documents and Defendants’ contracting conduct did not support a finding of separateness because there was evidence that Premier had the power over all system activities, including (1) developing and approving strategic plans, business plans, and budgets; (2) controlling the hospitals’ debt incurrence; (3) assessing costs to the hospitals to implement new technologies and programs; (4) allocating the system’s income and losses to the hospitals’ four parent holding companies; (5) establishing credentialing criteria under which decisions on medical staff admissions, privileges, and membership would be determined; and (6) negotiating all managed care contracts and managing all relationships with payers.

As health care providers and health industry participants seek to find innovative ways to collaborate, this case is an important reminder that courts place significant emphasis on how joint venture participants function and operate rather than the corporate form of the organization. Thus, the existence of a joint operating agreement does not provide an automatic shield from antitrust scrutiny if the activities of the joint arrangement are challenged. In addition, as this case demonstrates, the examination of conspiratorial capacity involves a highly factual inquiry where principal considerations include a parent’s or general partner’s ability to control the actions of the affiliates or members and the resultant unity of interest between the joint venture participants.