[Senate Hearing 112-869]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-869

 
THE VIDEO PRIVACY PROTECTION ACT: PROTECTING VIEWER PRIVACY IN THE 21ST 
                                CENTURY

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON PRIVACY,
                         TECHNOLOGY AND THE LAW

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 31, 2012

                               __________

                          Serial No. J-112-59

                               __________

         Printed for the use of the Committee on the Judiciary




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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 CHUCK GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
CHUCK SCHUMER, New York              JON KYL, Arizona
DICK DURBIN, Illinois                JEFF SESSIONS, Alabama
SHELDON WHITEHOUSE, Rhode Island     LINDSEY GRAHAM, South Carolina
AMY KLOBUCHAR, Minnesota             JOHN CORNYN, Texas
AL FRANKEN, Minnesota                MICHAEL S. LEE, Utah
CHRISTOPHER A. COONS, Delaware       TOM COBURN, Oklahoma
RICHARD BLUMENTHAL, Connecticut
            Bruce A. Cohen, Chief Counsel and Staff Director
        Kolan Davis, Republican Chief Counsel and Staff Director
                                 ------                                

            Subcommittee on Privacy, Technology and the Law

                    AL FRANKEN, Minnesota, Chairman
CHUCK SCHUMER, New York              TOM COBURN, Oklahoma
SHELDON WHITEHOUSE, Rhode Island     ORRIN G. HATCH, Utah
RICHARD BLUMENTHAL, Connecticut      LINDSEY GRAHAM, South Carolina
                Alvaro Bedoya, Democratic Chief Counsel
                Elizabeth Hays, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....     1
Coburn, Hon. Tom, a U.S. Senator from the State of Oklahoma......     4
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     7
    prepared statement...........................................    28

                               WITNESSES

Watt, Melvin L., a Representative in Congress from the State of 
  North Carolina.................................................     4
    prepared statement...........................................    30
Hyman, David, General Counsel, Netflix, Inc., Los Gatos, 
  California.....................................................    10
    prepared statement...........................................    42
McGeveran, William, Professor, University of Minnesota Law 
  School, Minneapolis, Minnesota.................................    11
    prepared statement...........................................    45
Rotenberg, Marc, Executive Director, Electronic Privacy 
  Information Center, Washington, DC.............................    13
    prepared statement...........................................    51
Wolf, Christopher, Director, Privacy and Information Management 
  Group, Hogan Lovells LLP, Washington, DC.......................    15
    prepared statement...........................................    63

                               QUESTIONS

Questions for William McGeveran submitted by Senator Al Franken..    68
Questions for Marc Rotenberg submitted by Senator Al Franken.....    69
Questions for David Hyman submitted by Senator Tom Coburn........    70
Questions for Christopher Wolf submitted by Senator Tom Coburn...    72

                         QUESTIONS AND ANSWERS

Statement of no response for William McGeveran and Marc Rotenberg    73
Responses of David Hyman to questions submitted by Senator Coburn    74
Responses of Christopher Wolf to questions submitted by Senator 
  Coburn.........................................................    81

                       SUBMISSIONS FOR THE RECORD

American Civil Liberties Union, Laura W. Murphy, Director, 
  Washington Legislative Office and Christopher Calabrese, 
  Legislative Counsel, Washington, DC, January 31, 2012, joint 
  letter.........................................................    85
Entertainment Merchants Association, Crossan R. Andersen, 
  President & CEO, Encino, California, December 13, 2011, letter.    90


THE VIDEO PRIVACY PROTECTION ACT: PROTECTING VIEWER PRIVACY IN THE 21ST 
                                CENTURY

                              ----------                              


                       TUESDAY, JANUARY 31, 2012

                                       U.S. Senate,
          Subcommittee on Privacy, Technology, and the Law,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:02 a.m., in 
Room SD-226, Dirksen Senate Office Building, Hon. Al Franken, 
Chairman of the Subcommittee, presiding.
    Present: Senators Franken, Leahy, and Coburn.

 OPENING STATEMENT OF HON. AL FRANKEN, A U.S. SENATOR FROM THE 
                       STATE OF MINNESOTA

    Senator Franken. This hearing will come to order. It is my 
pleasure to welcome all of you to the third hearing of the 
Senate Judiciary Subcommittee on Privacy, Technology, and the 
Law.
    Now, before we start, I just want to applaud the Supreme 
Court for its decision in the Jones case. It was, I believe, 
the right result, but it was also a call to action to Congress 
because, while law enforcement now needs a warrant to track 
your location, all of the companies that get your location 
information almost every day--your smartphone company, your in-
car navigation company, and even the apps on your phone--are 
still in most cases free to give out your location to whomever 
they want, as long as it is not the Government. I have a bill 
to fix that, and I think we need to take action on it right 
away.
    But today's hearing will focus on the Video Privacy 
Protection Act, a powerful privacy law that was written and 
passed by Chairman Leahy and Ranking Member Grassley of the 
full Judiciary Committee. I want to use this hearing to make 
sure that everyone knows what the Video Privacy Protection Act 
is and how it protects our privacy and our civil liberties. I 
want to look at how we might update the Video Privacy 
Protection Act for the 21st century, and I want to look at a 
specific bill to amend the law that was just passed in the 
House.
    Twenty-five years ago, Judge Robert Bork was before the 
full Senate Judiciary Committee as a nominee to the Supreme 
Court. During that hearing, a local reporter asked Judge Bork's 
video store for a record of the movies he had watched. There 
was no law against it, so the video store gave him the records, 
and the reporter wrote a story about them. The Senate Judiciary 
Committee was split on Judge Bork's nomination, but it was 
unanimous in its outrage over what had happened. There was not 
anything particularly memorable about Judge Bork's movie 
rentals. In fact, they consisted primarily of mysteries and 
caper films. But that was not the point. The point was that the 
movies we choose to watch are our business and not anyone 
else's.
    Soon after this, Senator Leahy and Senator Grassley 
introduced the Video Privacy Protection Act. The bill was 
reported out of the Committee unanimously and passed through 
the Senate and the House on voice votes.
    There has been renewed interest in the Video Privacy 
Protection Act in recent months, and I think that is great. But 
I have seen a lot of people talking about the law like it was 
some kind of relic, something that is so outdated that it does 
not make any sense anymore. So I want to take a moment to 
explain in simple terms what this law does for consumers.
    Thanks to the Video Privacy Protection Act, your video 
company cannot tell other people what you are watching unless 
you give them permission to do that. Now, when Chairman Leahy 
and Senator Grassley wrote the law, they were really smart 
about it, if I might say. They did not just say that a video 
company has to at some point get you to sign some form that 
says, ``I am OK with you telling people what I watch.'' No. 
They said that every time a video company wants to tell people 
what you watch, they have to check with you first. And that is 
an important right, because you probably do not care if people 
know that you watched some summer blockbuster. But if you are 
suddenly having trouble with your marriage and you are trying 
to get help, you might not want your friends and relatives to 
find out that you have been watching videos about marriage 
counseling or divorce. I also think that parents of a young 
child may want to watch documentaries about autism or 
developmental disabilities without broadcasting that to the 
world.
    This can be really sensitive stuff, and that is why the 
Video Privacy Protection Act is so important. It gives you the 
right to tell your video company what can be shared and what 
cannot.
    The Video Privacy Protection Act also protects your private 
sector against the government. Under the law, if the government 
wants to get your viewing records, it has to get a warrant, a 
grand jury subpoena, or a court order. This came up in one 
famous case where a local police department thought that the 
1979 movie ``The Tin Drum'' was obscene. Now, mind you, this 
was a movie about what happened in Nazi Germany just before 
World War II. It won an Oscar for best foreign film. But the 
police department went out and seized a list of everyone who 
had the movie and then drove around confiscating every copy. 
And in that case, the ACLU chapter in the Ranking Member's 
State of Oklahoma used the Video Privacy Protection Act to stop 
that.
    And so, without objection, I will add to the record a 
letter from the American Civil Liberties Union that stresses 
that this is a civil liberties law, too, not just a consumer 
protection law.
    [The letter appears as a submission for the record.]
    Senator Franken. The Video Privacy Protection Act also 
makes sure that video companies do not keep information about 
what you have watched after that information is no longer 
needed. This protects that information from getting lost, 
stolen, or hacked.
    Finally, the law gives people the right to have their day 
in court to defend their rights if a video company or the 
government violates these rights.
    So the Video Privacy Protection Act is a really important 
law for consumer privacy and for civil liberties, but things do 
change in a quarter century, and I am calling this hearing to 
see if we can update the law so that it can protect our privacy 
for another 25 years.
    One way we need to update this law is to make sure that it 
is keeping up with technology. It used to be that if you wanted 
to watch a video, you had to go to the video store or then wait 
for it in the mail after that. Now you can stream it directly 
to your computer in seconds. Streaming is the future of video, 
but no judge has ever decided whether or not the Video Privacy 
Protection Act covers streaming video companies. I think it is 
clear that the law does cover new technologies like streaming 
because it does not just cover ``prerecorded video cassette 
tapes.'' It also covers ``similar audio-visual materials.''
    But I do think there is a real risk that a judge might look 
at this law and say it does not cover streaming, it just covers 
DVDs and VHS tapes and things like that. So I do not want to 
leave the future of video privacy up to a judge. So if we are 
updating the Video Privacy Protection Act, I think we need to 
confirm that it covers video streaming technology. I also know 
that the courts are split about whether or not people have the 
right to enforce the data retention provision. That might need 
to be clarified as well.
    Those are just two ideas. I am sure the witnesses will have 
other suggestions. My goal here is to lay the groundwork for a 
fair and comprehensive update of the entirety of this law.
    Before I close, I want to touch on H.R. 2471, a recently 
passed House bill that would modify one aspect of the Video 
Privacy Protection Act. H.R. 2471 lets a video company ask for 
your consent just once up front to disclose the videos you 
watch instead of asking for consent on a case-by-case basis. 
Netflix has strongly supported this bill and has explained that 
it will make it easier for them to integrate into social media 
sites like Facebook. I am pleased to report that Netflix is 
here with us today to talk about their support.
    I want to be honest. Based on what I have seen so far, I 
have some reservations about H.R. 2471. First, it looks like 
the bill will basically undo users' ability to give case-by-
case permission to a video company on what it can tell people 
and what it cannot. And that worries me because case-by-case 
consent, I believe, is a really good thing. It is a really good 
thing that people can easily tell their video company, ``Sure, 
go ahead and tell people I watched `The Godfather,' but, no, do 
not tell them I watched `Yoga for Health, Depression, and 
Gastrointestinal Problems.' ''
    Senator Coburn. Is that one of----
    Senator Franken. Yes, for the record, that is a real title 
in the Netflix catalogue. And, by the way, it is an excellent 
film.
    [Laughter.]
    Senator Franken. So I am worried that H.R. 2471 will 
eliminate our ability to give case-by-case consent, but I am 
also worried that this bill will make these changes without 
confirming that streaming is covered or doing anything else to 
strengthen the law for consumers.
    Finally, I want to know how this bill will affect the Video 
Privacy Protection Act's protections against government 
snooping into our video records. But I am here to listen and to 
learn more about this, and this is a hearing on all proposals 
to update the Video Privacy Protection Act, not just H.R. 2471. 
And we have two great panels for that, but before I introduce 
them--do you want me to go to the Chairman first?
    Chairman Leahy. I tell you what. We have Senator Coburn 
here, and my----
    Senator Coburn. I am happy to yield to the Chairman.
    Chairman Leahy. No, no. I will yield to you and also to--I 
know Congressman Watt, who has been such a leader in this, has 
to get back to matters in the House, so I will wait until after 
he has testified and, of course, I will follow the rest of you.
    Senator Franken. We will go to the Ranking Member, Senator 
Coburn, for his remarks. Thank you, Senator.

STATEMENT OF HON. TOM COBURN, A U.S. SENATOR FROM THE STATE OF 
                            OKLAHOMA

    Senator Coburn. Mr. Chairman, thank you. I believe the 
Video Privacy Protection Act has become antiquated given all 
the new technology that is out there, and I would just note 
that you right now can share your music preferences through 
Spotify by setting up one time. You can share your book 
preferences by signing up one time. You can share your 
television programs through Hulu by signing up one time and 
news articles through Social Reader by signing up one time.
    I think the Chairman of the Subcommittee makes some good 
points, and I am anxious to hear Congressman Watt and his 
thoughts on this. I did have a chance to talk to your Ranking 
Member yesterday and hear his input in it, and I look forward 
to the input.
    Thank you, Mr. Chairman.
    Senator Franken. Thank you to the Ranking Member.
    I think we will go to our first witness. That is what the 
Chairman would like, and what the Chairman would like, the 
Chairman gets. Our first witness is Hon. Melvin L. Watt, the 
distinguished Representative for North Carolina's 12th 
District. He has represented the people of the 12th District 
since 1992. Representative Watt serves on the House Judiciary 
Committee where he is the Ranking Member on the Subcommittee on 
Intellectual Property, Competition, and the Internet. Prior to 
his election to the House of Representatives, Representative 
Watt practiced civil rights law for more than two decades. He 
received his J.D. from Yale School and his B.S. from the 
University of North Carolina.
    Representative Watt, welcome, and the floor is all yours.

STATEMENT OF HON. MELVIN L. WATT, A REPRESENTATIVE IN CONGRESS 
                FROM THE STATE OF NORTH CAROLINA

    Representative Watt. Thank you, Chairman Franken, Ranking 
Member Coburn, Senator Leahy, and Members of the Subcommittee. 
I am truly honored to have this opportunity to address the 
Subcommittee about the amendments proposed in H.R. 2471 to the 
Video Privacy Protection Act and consumer privacy in this 
rapidly evolving Digital Age.
    While I am the Ranking Member of the House Judiciary 
Committee's Subcommittee on Intellectual Property, Competition, 
and the Internet, the views I express here today are my 
individual views, and I do not speak for the Committee or the 
Subcommittee.
    I believe there are countless reasons to oppose H.R. 2471, 
which relate both to what the bill does and what it does not do 
and how that fits into the broader debate about how best to 
protect individual privacy in the volatile online environment.
    It is particularly timely that the Subcommittee holds this 
hearing today. Although online privacy has been at the 
forefront of discussion for the past few years, there has been 
a recent flurry of more intense discussion that I believe makes 
your hearing timely. Business leaders, consumer advocates, 
State and local elected representatives, and officials from 
each branch of the Federal Government have all weighed in with 
a variety of concerns and proposed solutions to address the 
absence of a uniform framework or approach to safeguard 
individual information in the thriving online environment.
    Attention has appropriately intensified as two Internet 
giants, Facebook and Google, have come under scrutiny for their 
data uses, policies, and practices. Likewise, Netflix, the main 
proponent of this bill, has had more than its fair share of 
regulatory complaints and consumer lawsuits with regard to the 
handling of user information.
    In the coming weeks, both the FTC and the Department of 
Commerce are expected to issue long-anticipated final reports 
on online privacy policy based on a series of roundtable 
discussions with relevant stakeholders and following up on 
their initial studies in 2010.
    Senators Kerry and McCain in the Senate and Representative 
Cliff Stearns in the House last year introduced comprehensive 
legislation designed to prescribe standards for the collection, 
storage, use, retention, and dissemination of users' personally 
identifiable information, and these bills generated debate more 
generally in the halls of Congress.
    This Subcommittee also held hearings to address the 
security of sensitive health records and personal privacy on 
mobile devices, and last week, in deciding whether GPS tracking 
violates a criminal defendant's Fourth Amendment right against 
unreasonable search and seizure, a majority of the Justices of 
the Supreme Court acknowledged the challenges we confront as a 
society in determining the so-called new normal for privacy 
expectations in the Digital Age.
    Against this backdrop, I will direct the remainder of my 
comments to H.R. 2471, which passed the House under suspension 
of the rules. While I may not always avail myself of all the 
new technology and revolutionary tools and services available 
over the Internet, let me say at the outset that I applaud the 
explosion of technological advances that has transformed 
forever the way we communicate and transact business. While I 
support innovation on the Web, however, I cannot do so at the 
expense of individual privacy. Given the gravity of issues 
involved, I believe it was a mistake for this bill to move 
through the House under the radar and without the benefit of a 
single hearing. But my concerns are not just about process. I 
believe that H.R. 2471 would have unintended negative 
consequences for consumers as well as affected businesses that 
will undoubtedly lose the confidence of their subscribers with 
the first privacy violation or data breach. Consumer desire to 
have access to the next cool tool should not be mistaken for 
the voluntary surrender of fundamental privacy interests.
    In addition to the lack of thoughtful process in the House, 
I believe there are at least four substantive problems with 
H.R. 2471.
    First, the bill leaves unaddressed the question of who the 
bill applies to, which I believe creates collateral, but 
important, intellectual property enforcement concerns. By 
declining to define what constitutes a videotape service 
provider under the VPPA, H.R. 2471 leaves open the possibility 
that businesses that provide video on demand over the Internet 
or those with dual distribution platforms like Netflix can 
avoid or delay compliance with legitimate discovery requests in 
copyright infringement actions.
    Second, the debate on H.R. 2471 centered on the online 
experiences of consumers with social media like Facebook. 
However, the bill as passed applies to physical and online 
videotape service providers alike, and disclosures are 
authorized to any person, not on friends on Facebook. 
Consequently, a consumer's private information is vulnerable to 
release to third parties like the news reporter who published 
the video rental history of Judge Robert Bork that paved the 
way to enactment of the Video Privacy Protection Act.
    Third, despite claims that the Video Privacy Protection Act 
is outdated, only a single provision of the statute was 
updated, leaving consumer-oriented provisions that should have 
been reviewed and strengthened unaltered.
    Fourth, and finally, no consideration was given to the 
effect that changes in the Video Privacy Protection Act will 
have on State laws that afford similar and sometimes broader 
protections to consumers. This oversight is likely to invite 
thorny conflict of laws disputes given the borderless 
boundaries of the Internet.
    While Internet users have a responsibility to self-censor 
and restrict the information they share about themselves, the 
reality is that many online users have a false sense of privacy 
due to their lack of understanding of lengthy and complex 
privacy policies they are compelled to agree to in order to use 
the service. As a result, online users often share a lot of 
personal information unknowingly and to unintended audiences. I 
do not believe that unsuspecting, unsophisticated, or casual 
Internet users should be deemed to relinquish their right to a 
basic level of privacy. And my concerns are heightened even 
more when the user is a vulnerable teen or young adult whose 
ability to adequately assess risk has not fully matured.
    Third-party access to dynamic social platforms are 
constantly in flux. A consumer's consent today to allow 
perpetual access to their viewing history is clearly not 
informed by who will be their friend tomorrow. Today, when 
online bullying of teens and young adults can lead to 
depression or even suicide and online predators can learn 
otherwise confidential, private information about their prey, I 
believe the selective and piecemeal amendment of the Video 
Privacy Protection Act is irresponsible.
    As one commentator has written, movie and rating data 
contains information of a more highly personal and sensitive 
nature. The member's movie data exposes a member's personal 
interest and/or struggles with various highly personal issues, 
including sexuality, mental illness, recovery from alcoholism, 
and victimization from incest, physical abuse, domestic 
violence, adultery, and rape.
    Justice Marshall wrote years ago that ``Privacy is not a 
discrete commodity, possessed absolutely or not at all.'' The 
objective is to strike an appropriate balance to develop 
meaningful protections for consumers while promoting a healthy 
online economy. I do not believe that H.R. 2471 has found that 
appropriate balance. I support a comprehensive online privacy 
plan that will address and mitigate the unintended consequences 
of third-party sharing. In that regard, I believe Justice Alito 
got it right when he said: ``In circumstances involving 
dramatic technological change, the best solution to privacy 
concerns may be legislative. A legislative body is well 
situated to gauge changing public attitudes, to draw detailed 
lines, and to balance privacy and public safety in a 
comprehensive way.''
    This hearing is an important step toward finding the right 
balance, and it is more critically important because the House 
failed to give the matters the kind of attention they required.
    I thank the Chairman for this opportunity and look forward 
to working across the Capitol to move forward. Thank you so 
much.
    [The prepared statement of Representative Watt appears as a 
submission for the record.]
    Senator Franken. Thank you, Representative Watt, and the 
purpose of this is to give a hearing to all these matters and 
issues. Your complete written testimony will be made part of 
the record.
    We are fortunate to have with us Chairman Leahy, who is the 
author of the Video Privacy Protection Act, and I understand 
that I left out Alan Simpson's role when I touted----
    Chairman Leahy. Alan was very important in that.
    Senator Franken. OK, so I apologize for that. He is a good 
friend. Today this law, the Video Privacy Protection Act, is 
just one of several critical privacy laws that the Chairman has 
written and passed during his tenure in the Senate, so I turn 
it over to the Chairman.

  STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE 
                        STATE OF VERMONT

    Chairman Leahy. I thank you very much, and it is good to 
see my friend Congressman Watt. We have worked together on so 
many things, from privacy issues to the Voting Rights Act, and 
I appreciate that collaboration.
    I should tell Chairman Franken--and I thank him for his 
responsible leadership he has done on this issue of privacy--we 
Vermonters come about it naturally. I see a smile from a friend 
of mine in the audience who probably has heard this story more 
than once, but one of the few things I have ever saved written 
about me in the press--and I actually framed it--was a sidebar 
to a New York Times profile.
    Now, to put this in perspective, you have to understand, my 
wife and I live in an old farmhouse in Vermont on a dirt road. 
We celebrated our--well, actually had part of our honeymoon 
there nearly 50 years ago, 50 years ago this summer. And 
hundreds of acres of land and fields that have been hayed and 
watched over by an adjoining farmer's family from the time I 
was a teenager, and they have known me since then.
    So the whole story goes like this: On a Saturday morning, a 
reporter in an out-of-State car sees this farmer sitting on the 
porch and asks, ``Does Senator Leahy live up this road?''
    He said, ``Are you a relative of his?''
    He said, ``No, I am not.''
    ``Are you a friend of his?''
    ``No, not really.''
    ``He expecting you?''
    ``No.''
    ``Never heard of him.''
    Now, we like our privacy in Vermont. In the Digital Age, 
ensuring the right to privacy is critical. But I think it 
becomes ever more difficult as our Government and businesses 
collect and store and mine and use our most sensitive personal 
information for their own purposes--not ours, but theirs. 
Whether it is sensitive medical records, private financial 
information, or personal thoughts and feelings, I have worked, 
as so many others on this Committee have, to ensure that 
Americans' privacy rights are respected.
    We talked about the Video Privacy Protection Act from 1988. 
When I introduced the bill, I said that it was intended to help 
make all of us a little freer to watch what we choose, without 
public scrutiny. More recently, I have worked at protections 
for library and book seller records in Section 215 of the USA 
PATRIOT Act.
    Now, it is true that technology has changed, as the 
Chairman mentioned that Justice Alito said, but I think we 
should all agree that we have to be faithful to our fundamental 
right to privacy and freedom. Today the social networking, 
video streaming, the cloud, mobile apps, and other new 
technologies have revolutionized the availability of Americans' 
information. But they are also outpacing our privacy laws. That 
is one of the things we have to think about.
    So I continue to push to enact the Personal Data Privacy 
and Security Act to create a nationwide data breach 
notification standard and better combat cyber crime. That is 
why I proposed a comprehensive review and update of the 
Electronic Communications Privacy Act.
    Recently some companies that dominate various aspects of 
cyberspace have announced that they want to simplify matters so 
that they can more easily track Americans' activities across 
the board, obviously to their own financial benefit. But I 
worry that sometimes what is simpler for corporate purposes is 
not better for consumers. It might be simpler for some if we 
had no privacy protections, if we had no antitrust protections, 
if we had no consumer protections. It would be simpler for 
some, but it certainly would not be better for Americans. And I 
worry about a loss of privacy because of the claimed benefit of 
simplicity.
    Privacy advocates and elected representatives from both 
sides of the aisle have serious concerns and serious questions. 
We are looking for information and answers. When dominant 
corporate interests entice a check-off in order to receive what 
may seem like a fun new app or service, they may not be 
presenting a realistic and informed choice to consumers. A one-
time check-off that has the effect of an all-time surrender of 
privacy does not seem like the best course for consumers. I 
worry that the availability of vast stores of information via 
corporate data banks also makes this information readily 
available to the government, which has almost unfettered power 
to obtain information with an administrative subpoena and so-
called national security letters. So I think we need to have 
comprehensive reform.
    Now, Representative Mel Watt is a thoughtful leader on 
these issues, and it is good that he is here, as well as those 
from corporate America. But I am hearing from many privacy 
advocates who have expressed concern about the privacy 
implications of the House-passed proposal. A key concern is 
that a one-time check-off of consent to disclose, mine, sell--
sell, sell--and share information does not adequately protect 
the privacy of consumers. And the House's proposal updating the 
law does not cover streaming and cloud computing to the extent 
I would like. So we need to move forward with a comprehensive 
review and update of the Electronic Communications Privacy Act 
and also see how best to update to the Video Privacy Protection 
Act.
    I want to thank the Chairman for doing this, and I just 
want to stress again that this Vermonter likes his privacy. And 
I especially do not like it when somebody says, ``We are just 
going to make life simpler if we sell your privacy.''
    Senator Franken. Thank you, Mr. Chairman.
    We are now going to go to the second panel. Thank you 
again, Representative Watt. You were the first panel. Evidently 
a single person can be a panel.
    Senator Franken. If the panel would come forward, I would 
like to introduce our second panel of witnesses.
    David Hyman is the general counsel of Netflix. Mr. Hyman 
has served in this role for the past decade and has seen the 
company grow tremendously during that period. Prior to joining 
Netflix, Mr. Hyman was the general counsel of Webvan, an 
Internet-based grocery delivery service. He received both his 
J.D. and B.A. from the University of Virginia.
    Bill McGeveran is an associate professor of law at the 
University of Minnesota, where he specializes in information 
law, including digital identity and data privacy. Before 
joining the university, he was a resident fellow at Harvard's 
Berkman Center for Interest and Society and a litigator in 
Boston. Professor McGeveran received his J.D. from NYU and his 
B.A. from Carleton College in Minnesota. Finally, I should add 
that Professor McGeveran was once a staffer for Senator Schumer 
back in the days in the House of Representatives.
    Marc Rotenberg is the executive director of the Electronic 
Privacy Information Center, which he co-founded in 1994. He 
chairs the American Bar Association Committee on Privacy and 
Information Protection and has edited several privacy law 
textbooks. Prior to founding EPIC--that is, again, the 
Electronic Privacy Information Center, EPIC--Mr. Rotenberg was 
counsel to Senator Leahy, where he advised the Senator on the 
law that we are considering today, the Video Privacy Protection 
Act. He received his J.D. from Stanford Law School and his B.A. 
from Harvard College.
    Christopher Wolf is the director of the privacy and 
information management practice at Hogan Lovells here in 
Washington, and he is also the founder and co-chair of the 
Future of Privacy Forum. He was the editor and lead author of 
the Practicing Law Institute's first treatise on privacy law 
and has authored numerous publications on privacy. He received 
his J.D. from Washington and Lee University and his A.B. from 
Bowdoin College.
    I want to thank you all for being here today. We will start 
with Mr. Hyman.

 STATEMENT OF DAVID HYMAN, GENERAL COUNSEL, NETFLIX, INC., LOS 
                       GATOS, CALIFORNIA

    Mr. Hyman. Chairman Franken, Ranking Member Coburn, thank 
you for the opportunity to testify today on the Video Privacy 
Protection Act. My name is David Hyman. I have served as the 
general counsel of Netflix since 2002: a time when streaming 
video over the Internet to a ``smart'' TV was more the stuff of 
a sci-fi miniseries than a topic of serious consideration in a 
board room, much less a Congressional hearing. How far we have 
come in such a short period of time. Today's hearing is a 
testimony to the incredibly dynamic and powerful innovation 
engine of our Internet economy.
    Netflix was founded in 1997 as a DVD-by-mail service. To 
many, the use of the Internet and the Netflix Web site was 
nothing more than a way to submit orders for physical disc 
delivery. But for Netflix, we saw an opportunity to use 
technology in a way that helped consumers discover movies and 
TV shows they would love, as well as provide business 
opportunities for content producers and distributors. The 
popularity of our DVD-by-mail service grew rapidly. But with 
innovation deeply rooted in our corporate DNA, we continued to 
research and try new and compelling consumer offerings. We were 
an early pioneer in the streaming of movies and TV shows over 
the Internet to personal computers. And in 2008, we began to 
deliver instant streaming video to televisions through the use 
of a handful of Internet-connected devices. Today, more than 21 
million consumers in the United States use the Netflix 
streaming service on more than 700 different types of Internet-
connected devices, including game consoles, mobile phones, and 
tablets. And in the last three months of 2011, we delivered 
more than two billion hours of streaming movies and TV shows to 
those consumers.
    At the same time that the Netflix streaming service has 
seen such uptake by consumers, the world of social media has 
exploded in popularity. Embodied by the growth of Facebook, the 
social Internet offers tremendous opportunities for consumers 
and businesses. Netflix believes that social media offers a 
powerful new way for consumers to enjoy and discover movies and 
TV shows they will love. To this end, we have been offering our 
members outside the United States the opportunity to share and 
discover movies with their friends through the Facebook 
platform. While it is early in the innovation process, we have 
seen strong consumer interest in our social application, with 
more than half a million subscribers outside the United States 
connected with Facebook.
    Unfortunately, we have elected not to offer our Facebook 
application in the United States because of ambiguities in the 
Video Privacy Protection Act. Under this law, it is unclear 
whether consumers can give ongoing consent to allow Netflix to 
share the movies and TV shows they have instantly watched 
through our service. The VPPA is an unusual law; unlike most 
Federal privacy statutes, the VPPA could be read to prohibit 
consumers who have provided explicit opt-in consent from being 
able to authorize the disclosure on an ongoing basis of 
information they so desire to share. The friction that this 
ambiguity creates places a drag on social video innovation that 
is not present in any other medium, including music, books, and 
even news articles.
    Recognizing this, the House recently passed a bipartisan 
bill, H.R. 2471, that clarifies consumers' ability to elect to 
share movies and TV shows they have watched on an ongoing 
basis. H.R. 2471 leaves the opt-in standard for privacy within 
the VPPA undisturbed. Netflix supports the opt-in standard and 
believes that this approach is workable and consistent with our 
members' expectations and desires.
    The VPPA singles out one type of data sharing. Instead of 
trying to graft specific notions about video privacy from 
almost 25 years ago into the dynamic information age of today, 
we would encourage a measured and holistic review of privacy 
for the 21st century, one designed to foster continued 
innovation while balancing the desires and privacy expectations 
of consumers. Such a review will understandably take 
considerable time and effort, and we are ready to assist. In 
the interim, it is our hope that the Senate will see the value 
in clarifying the right of consumers to opt in to ongoing 
sharing under the VPPA and quickly approve H.R. 2471.
    Again, I thank you for the opportunity to be here today, 
and I look forward to your questions.
    [The prepared statement of Mr. Hyman appears as a 
submission for the record.]
    Senator Franken. Thank you, Mr. Hyman.
    By the way, your complete written testimony will be made 
part of the record.
    Professor McGeveran.

   STATEMENT OF WILLIAM MCGEVERAN, PROFESSOR, UNIVERSITY OF 
          MINNESOTA LAW SCHOOL, MINNEAPOLIS, MINNESOTA

    Mr. McGeveran. Thank you. Chairman Franken, Ranking Member 
Coburn, and Members of the Subcommittee and staff, thank you 
for inviting me to testify here today.
    My name is William McGeveran. I am a law professor at the 
University of Minnesota. My teaching and research focus on 
Internet, privacy, and intellectual property law. In that 
context, I have written about the Video Privacy Protection Act, 
which I consider a model for privacy legislation more 
generally.
    Now, unquestionably, there are enormous benefits to the 
online recommendations we get from friends through sources like 
Facebook or Spotify, and I myself use social media and those 
recommendations heavily. But the potential problems are serious 
too, as others have noted. In one article, I argued that the 
key to getting that balance right is securing genuine consent. 
That means an individual sent a social message intentionally, 
not by mistake. If we have too many accidental disclosures, we 
undermine the privacy of personal matters and also the accuracy 
of the recommendations, the fact that our friend really wants 
us to see this movie rather than passively letting us know that 
he saw it and it turns out maybe he did not like it very much. 
The VPPA is designed to secure that sort of genuine consent.
    I want to emphasize three points: first, the important 
interests behind the VPPA; second, the fact that amendments are 
not necessary to keep up with technology; and, finally, the 
problems with H.R. 2471.
    First, the VPPA safeguards important interests, as others 
have noted. Why else did a newspaper reporter think Judge 
Bork's rental history might be interesting in the first place 
except that it would be revealing of something about him?
    In my view, the greatest flaw in the existing VPPA is its 
limitation to video, which arises from a historical accident 
around its enactment. Unintended disclosure of a user's choices 
of books, music, films, or Web sites can also constrain the 
capacity to experiment and explore ideas freely. If the 
Committee revisits this statute, I believe you should consider 
extending protection to reading and listening habits as well as 
viewing. That was part of the intent of the California Reader 
Protection Act, which took effect at the beginning of the 
month. In general, the law ought to protect private access to 
any work covered by copyright, not just movies.
    Second, the VPPA, in its current form, already allows video 
companies to implement social media strategies, including, if 
they wish, integration with Facebook. Now, it is true that the 
VPPA requires opt-in consent every time a viewer's movie 
choices get forwarded to a third party, and that includes 
friends in a social network. That is not an ambiguity. That is 
actually clearly what the law says.
    But it is actually easier to satisfy those requirements 
online than off. The statute's authors, after all, such as 
Senator Leahy, envisioned a video rental store getting the 
customer to sign a separate document with pen and paper every 
time in person. On the Internet, by comparison, each time users 
push the button to play a movie, they could be offered a ``play 
and share'' button right alongside it allowing them to both 
show the video and post that information in social networks.
    I think it would be quite radical to assert that an 
electronic format does not fulfill the requirement for written 
consent under the statute. That interpretation would undermine 
every clickwrap and ``I agree'' button that is on the Internet. 
It is contrary to the E-SIGN Act and to all the case law I have 
seen.
    I think the real objection here is not about technology. It 
is a disagreement with the VPPA's explicit policy choice to get 
case-by-case consent rather than a one-time authorization.
    Finally, I do want to note that H.R. 2471 has a lot of 
problems and misses some opportunities for reasonable 
compromise. I will just note a few.
    Changes to the statute apply to every disclosure, not just 
those in social networks. By rushing to address Netflix and 
Facebook, the bill reduces privacy in many other settings, from 
law enforcement to behavioral advertising. By specifically 
mentioning the Internet, I am concerned the bill may foreclose 
electronic consent through other technologies such as cable or 
satellite, and that is a real concern.
    The provision for withdrawing consent says nothing about 
how it is supposed to be done. That vagueness may, apparently, 
permit companies to comply by making it easy to give consent 
but very cumbersome to withdraw that consent.
    Most important, the bill passed by the House replaces a 
robust consent provision with a very weak alternative. There 
may be other ways to get genuine consent than what is offered 
in the VPPA. For example, what about general authorization with 
a short time limit, say one month, and granular, clear opt-out 
for individual postings? I urge the Committee and the bill's 
supporters to explore those sorts of creative compromises to 
streamline the VPPA for the 21st century without vitiating its 
important protection for individual privacy.
    Thank you, and I look forward to questions.
    [The prepared statement of Mr. McGeveran appears as a 
submission for the record.]
    Senator Franken. Thank you very much, Professor.
    Mr. Rotenberg.

  STATEMENT OF MARC ROTENBERG, EXECUTIVE DIRECTOR, ELECTRONIC 
           PRIVACY INFORMATION CENTER, WASHINGTON, DC

    Mr. Rotenberg. Mr. Chairman, Senator Coburn, thank you very 
much for the opportunity to testify today.
    As you know, there are few issues of greater concern to 
Internet users than the protection of privacy. In fact, 
according to the Federal Trade Commission, over the past decade 
the top concern of American consumers has been privacy and 
identity theft, so the hearing that you are holding today is 
very important, very timely, and of great concern to a lot of 
people.
    I wanted to begin by talking about the purpose and passage 
of the Video Privacy Protection Act. As you suggested, Mr. 
Chairman, in many ways this was a smart and forward-looking 
piece of legislation. Among the various provisions that 
Congress enacted 25 years ago was one that said let us not keep 
personal information longer than is necessary. Today we have an 
enormous problem in this country with data breaches, identity 
theft, and companies keeping data on their customers and their 
clients for much longer than they should. Fortunately, in this 
area there are strong safeguards that have prevented and 
protected users of these new services from those types of 
problems.
    What the Video Privacy Protection Act sought to do was to 
deal with the new reality in video services. Prior to the mid-
1980s, as you know, most people watched broadcast television or 
saw movies. There was very little collection of personal data 
about individuals' particular movie preferences. And so when 
the story broke about the access to Judge Bork's video rental 
records, Congress appropriately said we need to put in place 
some safeguards for that information that businesses were now 
able to collect.
    Now, the act establishes a strong presumption in favor of 
privacy, but it is not a prohibition against disclosure. 
Individuals always have the right to consent to disclosure. Law 
enforcement has the right under a court order to get access to 
records in the course of an interrogation. And even for 
marketing purposes, personal information can be disclosed, and 
this is the key provision that I would like to draw your 
attention to, because there was an important compromise that 
the Congress struck when they were considering the act. They 
said when it comes to the fact that someone may happen to be a 
customer of a video service, there really should be few 
restrictions on disclosing that fact, and the privacy 
protection was essentially an opt-out. Congress even said that 
if the company wanted to disclose the fact that a person was 
interested in science fiction movies or mystery movies or 
action adventure, companies in those circumstances as well 
could disclose those facts simply with the opt-out protection.
    But when it came to the actual titles of particular movies 
that would reveal so much about a person's personal interests 
and the likes, Congress said, well, there we need a higher 
level of protection. That should really be opt-in. And if a 
person chooses in a particular case to disclose that 
information, they should be free to do so, and the act allows 
for it.
    Now, I want to say very directly to Netflix that this 
argument that they are making that this law somehow stands in 
the way of integration with Facebook is simply not right. They 
have the freedom today under the law to note when Netflix users 
are using Netflix services. They can even go the next step and 
talk about the types of movies that their customers are 
viewing. What the law tries to do is establish a line at the 
point that the company wants to say, ``And here is the 
particular movie that one of our users is now viewing.'' That 
is where the law says, please, in those circumstances, get opt-
in consent.
    Now, I want to make a further point here because I actually 
believe that many of the House members who voted for this bill 
do not fully understand the consequence of the amendment. It is 
not just the friends of that individual to whom the fact of the 
specific movie viewing will be disclosed. It is also to Netflix 
business partners, and it is also potentially to law 
enforcement, because what Netflix is asking users to do is to 
provide a blanket consent that gives them the opportunity to 
disclose specific movie viewing to any party under any 
circumstance that Netflix chooses to. This knocks out the 
cornerstone of the act. It takes away the key provision that 
was put in place to give users meaningful consent.
    Obviously, I do not think this is going to support online 
privacy and, frankly, I do not think Netflix users want this 
provision. But I do think changes could be made to the act to 
modernize it and to update it. I think it should be applied to 
all streaming services. I think that data destruction provision 
needs to be coupled to the private right of action. I would 
also like to see more transparency so that users of the service 
actually know how their personal information is being used, and 
I think companies should be required to routinely encrypt the 
data they collect. Those types of changes to the act actually 
would update it, would continue to promote a viable and useful 
service for many users, and I hope they will be considered by 
the Committee.
    Thank you.
    [The prepared statement of Mr. Rotenberg appears as a 
submission for the record.]
    Senator Franken. Thank you, Mr. Rotenberg.
    Mr. Wolf.

     STATEMENT OF CHRISTOPHER WOLF, DIRECTOR, PRIVACY AND 
INFORMATION MANAGEMENT GROUP, HOGAN LOVELLS LLP, WASHINGTON, DC

    Mr. Wolf. Thank you, Chairman Franken, Ranking Member 
Coburn, and Members of the Subcommittee. My name is Christopher 
Wolf, and I am a privacy lawyer at Hogan Lovells, where I lead 
that firm's global privacy practice. I am also a privacy 
advocate. As part of my pro bono work, I won a leading case 
against the government for violating the Electronic 
Communications Privacy Act. I am part of a group advising the 
OECD on its privacy guidelines. I am on the EPIC Advisory 
Board, and I founded and co-chair the Future of Privacy Forum, 
a think tank with advisory board members from business, 
consumer advocacy and academia, focused on practical ways to 
advance privacy. I am pleased that Professor McGeveran is a 
member of that advisory board.
    Fundamentally, privacy is about control. Indeed, a 
principal goal of privacy law is to put choices and decisions 
in the hands of informed consumers. With the advent of video 
streaming and social sharing, the Video Privacy Protection 
today stands in the way of consumers' exercising control and, 
thus, limits their choices and even limits free expression.
    The VPPA, enacted nearly a quarter of a century ago during 
the Betamax era, was designed to prevent prying into people's 
video rental history. The purpose of that law was not to stop 
people from sharing information about the videos they watched 
or to dictate how they share. Indeed, the law's laudable 
purpose was to give control and choice to consumers, to let the 
consumers decide whether and how to share their video-watching 
information.
    In 1988, when the VPPA was enacted, no one dreamed of 
streaming video and social sharing. So when that pre-Internet 
era law is applied to the world of online video and social 
media, it can be read to frustrate the choices of consumers to 
authorize the disclosure on an ongoing basis of the streaming 
movies they have watched online.
    For many people, automatic sharing in social media is how 
they shape their online identities and how they share ideas. 
Facebook users commonly utilize a one-time authorization, a 
durable sharing option, to share a wide range of information 
with their friends. But when it comes to sharing their online 
video experiences, the law gets in the way.
    Take a person who is an avid video watcher watching 100 
short videos per week. She wants to share every video she 
watches with her friends, just as she shares every song she 
listens to on the streaming music service Spotify and just as 
she shares every item she reads online on the Washington Post 
through a Facebook social sharing app. But current law suggests 
she is not fit to make the frictionless sharing decision with 
respect to videos she watches. Should this video file have to 
opt in 100 times per week? Does making her do so serve any 
purpose other than to annoy her and to take needless time? The 
constant, legally required interruption to her online 
experience harkens back to the day when pop-ups had to be 
clicked on to proceed online. Our frequent video viewers should 
be given the opt-in choice to share all of her viewing 
experience if that is what she wants.
    In contrast to the restrictions of the VPPA, there are no 
legal restrictions on her ability to socially share every e-
book she reads. Through a durable sharing option, she easily 
can share the fact that she read the book entitled ``The 
Godfather,'' but the law stands in the way of her similarly 
sharing the fact that she watched the movie entitled ``The 
Godfather.'' That makes no sense.
    Of course, not everyone wants to share their viewing 
experiences with their friends online, and they do not have to 
share. And if someone prefers to share their video-watching 
experiences on a case-by-case basis, he or she can do so 
manually, just as people occasionally post news stories they 
read on the Washington Post on Facebook rather than choosing 
the automatic sharing option.
    Similarly, a person who chooses to share on a continuous 
basis can disable the share function before watching a 
streaming video that he or she wants to exclude from online 
post, such the ``Yoga for Health'' video that Senator Franken 
referenced.
    In order to clarify the uncertainty of the language in the 
VPPA on disclosures, I support an amendment such as H.R. 2471 
allowing durable sharing choice for consumers, which in turn 
will permit frictionless social sharing. I agree that as a 
privacy best practice, the durable choice option should be opt 
in and presented prominently, separate and distinct from the 
general privacy policy and the terms of use of an online 
service. That is genuine consent.
    I join the Center for Democracy and Technology in 
concluding that such an amendment will not undermine the 
fundamental purpose of the VPPA. Even though some Senators 
personally may feel that sharing all the movies one watches is, 
to use a phrase not heard much anymore, TMI, too much 
information, people should as a matter of free expression be 
able to share as they choose, and companies should not face 
legal penalties for providing them with that choice.
    As governments around the world, including our own, 
consider ways to improve their privacy frameworks, there are 
big decisions to be made, as Representative Watt pointed out in 
his presentation. Starting a legislative process in the name of 
privacy protection through which lawmakers decide case by case 
what information and by what means consumers can share online 
seems terribly ill-advised. In contrast, amendment of the VPPA 
to permit full user choice and control fits squarely within the 
preferred privacy framework, one that empowers consumers.
    Thank you for the opportunity to appear here today. I look 
forward to your questions.
    [The prepared statement of Mr. Wolf appears as a submission 
for the record.]
    Senator Franken. Thank you, Mr. Wolf, for your testimony.
    Let me start with Professor McGeveran because I want to 
make a few things clear about what this bill does and does not 
do. I talked a little in my opening statement--or about what 
the amendment does and does not do, about what the video--I 
talked about what the Video Privacy Protection Act does. I want 
to talk for a moment about what it does not do. A lot of people 
have been saying that the Video Privacy Protection Act actually 
prohibits people from sharing their viewing habits on social 
networking. In fact, one article said that, ``An antiquated 
1988 bill called the Video Privacy Protection Act forbids the 
disclosure of one's video rental information even if the renter 
is OK with the disclosure.''
    Is that right, Professor McGeveran? Does this law prevent--
and I am talking about the VPPA--video companies from 
integrating into Facebook or other social networking sites even 
if the user wants them to?
    Mr. McGeveran. No, it is not right, Senator. The underlying 
existing statute, which I am concerned it is called 
``antiquated'' since that is the year I graduated from high 
school. But the statute requires consent every time. But as I 
mentioned in my opening statement, that can be done simply by 
saying here is a button to press when you play the movie, 
because presumably you have to press a button to play the 
movie, and right next to it here is a button to both play and 
share. You can post. You just have to be asked every time you 
see a movie online. That seems relatively easy to effectuate.
    Senator Franken. So it would be easy to say I can share.
    Mr. McGeveran. That is right.
    Senator Franken. Mr. Wolf talked about it would be really 
easy to disable the sharing, but is there anything in the 
amendment that says how that would happen? Could an online 
video company, one less scrupulous than Netflix, just have it 
really hard--is there anything in the law that would prevent 
them from making it almost impossible to figure out how to 
disable it?
    Mr. McGeveran. In the House bill, the way it is set up now, 
it says that you could enable consent until you took it away, 
but there is nothing in the bill that gives any requirements 
about how that would be done.
    Mr. Wolf mentioned some best practices. You know, I think a 
scrupulous company would make it easy. But this law is not only 
going to apply to companies that we believe are going to do the 
right things, and it does not--the company could have no button 
or access anywhere on its Web site to do this. It could perhaps 
have no explanation on its Web site that you had the right to 
do this, and it would be up to the consumer to figure it out. 
And the House bill allows that kind of arrangement.
    Senator Franken. OK. I just want to make that kind of 
clear, that to opt in to sharing a video, what movie you are 
watching, would be no more burdensome than just watching the 
movie itself.
    Mr. McGeveran. Under current law.
    Senator Franken. So, in other words, press one button. 
However, disabling the overall consent to watch everything 
could be impossible to find, essentially.
    Mr. McGeveran. That is right. The House bill does not----
    Senator Franken. Mr. Rotenberg, do you agree with that?
    Mr. Rotenberg. I think this is a very important point, 
Senator, and also what Professor McGeveran has pointed out is 
that there are innovative ways to allow individuals to click, 
you know, ``play and share''. There is the integration, and 
there is the disclosure, or to simply click ``play,'' which is 
I just want to see a movie, I do not need to tell the world 
about it. But the point that you are making which is of 
particular concern to us is under the House approach, once you 
basically have ``play and share stuck,'' that button setting, 
it may be very difficult to unstick because there is nothing in 
the proposal that would make it easy to withdraw the consent.
    Senator Franken. OK, thank you.
    Mr. Hyman, there is no company that better exemplifies the 
promise of streaming than Netflix. Netflix introduced its 
streaming in 2008. Today 90 percent of Netflix's 24 million 
subscribers have streaming subscriptions; only 45 percent have 
DVD subscriptions, and that number is dropping. In fact, if you 
look at ``About Us,'' the ``About Us'' section on Netflix's Web 
site, the word ``DVD'' does not appear once. It is all about 
streaming, and for good reason, because that is the future of 
video.
    I mentioned in my opening statement that there may be some 
disagreement as to whether or not streaming video companies are 
covered by the Video Privacy Protection Act. Mr. Rotenberg 
suggested in his testimony that it would be helpful to change 
language in the Video Privacy Protection Act to confirm that it 
does, in fact, cover streaming video companies.
    Mr. Hyman, would Netflix support doing that?
    Mr. Hyman. Mr. Franken, Netflix would probably not--we 
would not support that. I think the issue for us is really one 
of what is video in the future and how do you think about that 
in the Internet age. Video embedded into news stories, does 
that become a news story or is that streaming video? Music 
videos, is that music or is that videos? Books. You know, I 
recently read a book called ``A Visit from the Good Squad,'' 
which is a very good book. Interestingly, it uses in there 
texting. It has a PowerPoint presentation. You can imagine in 
the future that books will incorporate video. Does that now 
mean that that is covered by the VPPA?
    So I think we have a host of issues relative to what is 
video in the future, and so just extending the Video Privacy 
Protection Act into the Internet raises a host of issues, and I 
think there is a host of other players that need to be involved 
in that.
    So, again, as we mentioned in the testimony, a holistic 
approach and a comprehensive approach would be one that Netflix 
would support and be involved in, but merely taking the VPPA 
and saying it applies to streaming, I think, opens a whole host 
of issues that need to be carefully addressed.
    Senator Franken. Would anyone care to address that in terms 
of--because I do not think this amendment is comprehensive at 
all. And so I think you raise a lot of great issues about this, 
but it seems to me to say that since the VPPA applied to what 
we think of as movies, movies are going to be streamed.
    Mr. Hyman. They are.
    Senator Franken. They are going to be. So that this law, it 
seems like that you need to apply streaming to this, and I am 
troubled by your excluding, trying to exclude streaming at all.
    Does anyone have anything to say about that?
    Mr. Rotenberg. Well, Mr. Chairman, I think perhaps the 
advocates of that approach are drawing the wrong line. The 
Video Privacy Protection Act was not trying to regulate 
technology. It was not saying we will treat, you know, video 
rental cassettes in one way and other things in a different 
way. It actually says similar materials should be treated in a 
similar way.
    What the act is trying to do is regulate the collection and 
use of personally identifiable information, and the reason you 
need to do that in the digital world is because when you move 
from broadcast of television and movies to this kind of one-to-
one service offering, these companies are now collecting a lot 
of personal information about their customers. And so what the 
law tries to do is to say if you are going to collect all that 
data, then you need to protect.
    And I think the other point that should be brought out as 
we think about these new techniques for delivering of video is 
that companies today are collecting a lot more information than 
they did 25 years ago. And so I would think that the 
inclination at this point in Congress would actually be to 
strengthen the law, recognizing how much more information is 
collected.
    Senator Franken. Well, thank you. We will go to another 
round. I have run over my time. We will go to the Ranking 
Member, Senator Coburn.
    Senator Coburn. First of all, let me thank you for your 
testimony. I learned a lot from what you had to say. And I am 
prone to agree with the Chairman on his concerns about this 
bill as I look at it. And I really do not see a big difference 
from granting permission one click at a time to a blanket 
consent. But I also think prudence in terms of protection of 
privacy ought to be the thing that ought to guide us.
    There is no question Netflix with their policy throughout 
the rest of the world that is not available here to online 
consent for that gives them an asset, my asset, my privacy 
asset, that I readily give to me if I am one of those that 
grants a blanket consent somewhere outside this country. I am 
giving them something of value that they can use to make money 
off of. And I am not sure--I am torn between whether we have 
the right to tell somebody whether they can grant a blanket 
consent or not. I do not know that that is our role. But I know 
it is our role to be concerned about the ultimate privacy 
protection that individuals deserve.
    So I would go back and I would ask the professor if he 
would give us a little further dissertation on what he thinks 
or means by the words ``genuine consent.''
    Mr. McGeveran. Thank you, Senator Coburn. The idea behind 
genuine consent is to say that it is thought out, it is 
intentional. We are helping a consumer, a customer, to post the 
information that he or she wants to post.
    I might have more sympathy toward changing the existing 
VPPA if I thought it did, in fact, make it very difficult for 
people to do that, because I think that recommendations of 
movies to our friends are really valuable. I learn a lot about 
movies I would like to see by hearing about them word of mouth 
from my friends. But as I mentioned before, what we have online 
is the capacity to make it very easy to secure a decision each 
time from the user, to say yes, I do intend to share this 
information now about this movie now. And the ability to say it 
for all movies in advance, we are not actually inconveniencing 
the user very much in an era where you are going to have to 
push either just one button or the other. So I would say 
genuine consent is making sure that it is intentional.
    Senator Coburn. So when I go through Dallas airport and use 
Dallas' wi-fi, at the bottom of that every time is ``I 
consent,'' I agree to their terms. Now, how many of you in this 
room have ever read that three pages of very fine print to say 
you agree to consent?
    Mr. McGeveran. Well, I have, but that is my job.
    Senator Coburn. Yes.
    [Laughter.]
    Senator Coburn. But you are a rarity.
    Mr. McGeveran. I am.
    Senator Coburn. And so the fact is, what you are saying is 
what is wrong with making a considered judgment each time.
    Mr. McGeveran. Exactly.
    Senator Coburn. Mr. Wolf.
    Mr. Wolf. Senator, I think you pointed out the problem with 
that, that when consumers are presented with choices over and 
over and over again, they tend to tune them out, and they will 
ignore them, and they will have no meaning whatsoever. They 
will just click through it to get to the function that they 
want to exercise.
    Senator Coburn. Well, let me bring you back to this point. 
If the question that comes up on my iPad is, Do you want to 
share this information through your social media?, and I have 
to say yes or no, that is all that is going to be required for 
Netflix to put up with each movie: Do you want this to be 
shared? You have to make a decision there. That is a one-line 
statement, which is very different. So if I am looking at a 
movie, an Arnold Schwarzenegger, which my wife hates but I love 
the action in them, and I am going to make a decision that I 
want everybody to know I am watching Arnold Schwarzenegger, and 
I am going to have to--it is one sentence. I am going to have 
to make that decision. Why is that not protecting the rights 
rather than blanket, and, ``Oh, I forgot about it,'' or ``I am 
hung over from the night before, and I am not thinking 
clearly,'' so, therefore, I have already granted--and I punched 
a button on something that I really do not want shared.
    The question is: Should we err on the side of privacy, or 
should we err on the side of commerce? And that is the real rub 
here. That is the thing that we have to decide.
    Mr. Wolf. I actually do not think that is the choice. If a 
consumer wants to share everything on their Facebook page, as 
many do--they share every article they read in the Washington 
Post, every book they read, every song they listen to. It is 
not a choice you or I might make, but a law that takes away 
that choice really ignores that there are people who want to do 
that. And as long as they are informed of the consequences of 
doing that and provided an opportunity--and I agree with the 
professor that the opportunity ought to be just as easy as it 
is to opt in--then I really do not see how it is the business 
of Congress to dictate how and when people share.
    Again, we are talking about legislating today, but we have 
no idea what the sharing techniques will be 20 years from now. 
And I will leave this to Mr. Hyman, but I understand that there 
are some devices to access Netflix where you cannot have that 
button or it is not easy to have that kind of button that you 
are talking about.
    Senator Coburn. That is fair. The point is there is a rub. 
There is a rub. And the argument is not simply that we are 
going to take away somebody's right to share. And it is not 
being a Big Brother. I will go back. I believe the decision is 
between protecting privacy and promoting commerce, and I think 
we ought to be able to figure out how to do both.
    Mr. Wolf. But I get back to my fundamental point, that 
privacy is and has all along been giving people the choice to 
control their information and who sees it and how it is 
disclosed.
    Senator Coburn. So there is no limitation to that choice if 
I get to make that choice each time. You are still giving them 
the choice. You are still giving--actually, we had a reference 
to the testimony that some think that the ability to use 
Spotify right now ought to have a choice each time. Is that not 
true? Did I not get that inference from your statement, Mr. 
McGeveran?
    Mr. McGeveran. Spotify is not set up in a way that would be 
compliant with the VPPA if it were video because your scroll of 
songs is sent out to all your friends automatically.
    Senator Coburn. Yes, but the point is, was it not your 
inference that you thought maybe people ought to be making 
decisions on that as well?
    Mr. McGeveran. That is right. I think the same thing, you 
press a ``play'' button for a song, you should be making a 
choice time by time whether that is something that goes out.
    Senator Coburn. So the question is how big of a choice do 
you make and whether you reconsider it. The question I would 
have technically is if I opt in for all of it, each time 
Netflix brings me a movie, do I have the option to opt out of 
that? In other words, do I have a default button that goes out?
    Mr. Wolf. Again, I think the opt-out option ought to be 
easy, but, you know, there are people who have webcams and they 
leave them on all the time, and some people think that is ill-
advised, they are oversharing, it invades their privacy. 
Imagine a law that Congress passes that says that the webcam as 
a matter of law will be turned off once every 24 hours, and you 
have to make the choice to turn it back on. That just has never 
been the business of Congress to tell people how they publish, 
how they share, and with whom they share. Privacy is about 
allowing people that choice.
    Senator Coburn. Again, I do not say your arguments do not 
carry large weight. I am just saying in terms of effectuating 
the protection of privacy, how are we going to do that? Let us 
say we go to this and we are going to have an opt-in. Where are 
the details on the opt-out?
    Mr. Wolf. Well, I agree, that needs to be----
    Senator Coburn. It is not in there.
    Mr. Wolf. That needs to be specified. But I really caution 
against the slippery slope of controlling every kind of 
information and every kind of technology in terms of how people 
share.
    Senator Coburn. We are not controlling it. What we are 
saying is you got to make a choice, and, you know, the 
question----
    Mr. Wolf. But only the choice you want them to make, not 
the choice that is available as to other information.
    Senator Coburn. No, no. There are two choices: opt in or 
opt out. The point is you got to still make the choice with 
your privacy, and I think there is a legitimate concern that if 
you opt in, will you have the same presence and available 
information to opt out. So the question I would have of Netflix 
is, if you have this or where you have it in Europe, does 
somebody every movie have an opportunity to opt out?
    Mr. Hyman. On the current implementation in Europe, there 
is an opt-out, do not share opportunity, beginning----
    Senator Coburn. Every time?
    Mr. Hyman. Every time. As Mr. Wolf pointed out, certain 
devices because technologically do not support that, it is not 
available on every device. It is available through the computer 
on every device, and you can unshare afterwards. But the 
implementation that we have made is you start the movie, the 
presumption is sharing, and there is a ``do not share'' button 
that you can click afterwards, right when the movie starts. 
Anytime you deal with the movie, you can elect to not share. 
And then after the movie is displayed on Facebook, you can go 
back and adjust your setting within Netflix to unshare that. 
There are also sharings that you can do in the Facebook side.
    Senator Coburn. So here is my question: What is the 
difference between an unshare opt-out and a share opt-out? They 
are both asking the same question. One is a presumption you are 
going to share all the time, but you are still making a 
decision each movie, unshare or not unshare.
    Mr. Hyman. Well, one is opt in and one is opt out.
    Senator Coburn. Yes, but the point is the decision for 
privacy is still made individually on every movie that they 
send down the stream. So what is the difference of having an 
opt-in or an opt-out? It defeats your whole argument. They have 
the same thing.
    Mr. Wolf. It does not defeat my argument, because I do not 
think it should be a matter of law.
    Mr. Hyman. I was going to say, I was going to echo--that is 
our implementation. Under the H.R. 2471, that is not required 
under law.
    Senator Coburn. I understand that.
    Mr. Hyman. We have done that because that is what we 
believe consumers want. I think the issue for us at the highest 
level is really an informed consent. I think most everyone on 
this panel agrees, I think, philosophically on making sure that 
consumers understand what information they are disclosing or 
how their information is being handled. So at the high level, I 
think we are all coming to it from the same approach. I think 
there is a philosophical difference that in some way you 
highlighted on: Is it opt in, is it opt out, or is it--you 
know, how does Congress control the way in which consumers can 
share, are available to share? The presumption that we are 
trying to advocate for in connection with supporting H.R. 2471 
is that it is really within the consumer's control to elect to 
do that if they so desire. It is an opt-in mechanism, and it is 
one in which they should be able to get informed consent.
    I think there is a question on this panel of whether or not 
consumers can ever give informed consent. On our side, I think 
we would take the position that, yes, consumers can give 
informed consent. And, in fact, under the legislation there is 
a specific opt-out so that it is not buried in some terms of 
use, which we are in support of. So the issue about----
    Senator Coburn. But if privacy is so important and if 
everybody at the table supports that, what is wrong with having 
the reminder that you are sharing your privacy? If it is that 
much of a value, if personal property rights and privacy rights 
are that important, what is wrong with having a reminder that 
you are giving away your privacy rights? If it is a value to be 
protected, if it is a virtue to be protected, your privacy, 
then what is wrong with the government saying there should be a 
reminder that you are giving your privacy away? What is wrong 
with that?
    Mr. Wolf. There ought to be reminders, and government ought 
to support education of consumers through cyber education of 
kids to tell them what harm they might do themselves online by 
sharing TMI. But the number of reminders one would need every 
day would be in the thousands----
    Senator Coburn. I do not need any reminders because I do 
not share anything.
    [Laughter.]
    Mr. Wolf. You are sharing your ideas right here, Senator.
    Senator Coburn. But the point is I have to, under the 
ethics law, fill out forms at the end of every year, and I have 
to get that. As a part of participating in the Senate, there 
are certain things I have to do as part of my responsibility. 
But the point is, if privacy is of that value and you value 
that privacy and the protection of that privacy, what is wrong 
with us saying you need to have a reminder, to me, the 
Chairman, a 12-year-old, that you need to have a prompt to say 
you are giving away your privacy?
    Mr. Wolf. So I can imagine someone opening up their mobile 
phone and they are about to talk in a public place and there is 
a law in Congress that says a pop-up has to appear that says, 
``You are in a public place. This is a reminder that you may be 
revealing private information about yourself. Click here to 
proceed.''
    Senator Coburn. You can imagine that. Again----
    [Laughter.]
    Mr. Wolf. Well, it is not so far away from what you are 
describing, Senator, because if we are going to require it for 
videos, there is no reason why we would not require it for all 
the other information that people choose to share. That is the 
world we live in. Certainly they should be given the right not 
to share, and they should be given the choice not to share. But 
I really do not think it is the job of Congress on such a 
granular basis to make that choice so difficult.
    Senator Coburn. Well, what is difficult? They are having to 
pop the button now to say do not share. There is no difference. 
They are hitting the button share and unshare right now, so 
what is difficult about saying share versus unshare?
    Mr. Wolf. I actually do not know what the experience has 
been in Europe with that and whether consumers object to it, 
whether they think it interferes with their experience or not.
    Senator Coburn. He just testified that his consumers wanted 
that.
    Mr. Wolf. I know it is available.
    Mr. Hyman. One issue, Senator, is that technology changes 
over time. So in order to implement that technology today, we 
are able to do it on certain devices. On other devices we are 
not able to do it. You know, and older legacy devices, we 
cannot go back and change those because of the way they have 
been designed. So, you know, people who have paid for some of 
our devices before now will not be able to take advantage of 
that feature because we cannot give them opt-out every time 
because Congress has told us we have to give them an opt-out 
every time?
    I think the issue for us, again, is, you know, giving that 
control to the consumer, and if the consumer so elects to share 
on an ongoing basis, and perhaps even you could say to opt out 
of the notice to unshare, if they do not want to be bothered by 
it every time because that is inconvenient for them, they have 
chosen to give their movie watching onto Facebook or other 
social media platforms, should it be a law that they cannot do 
that? And I think from our perspective, it is very important 
that the consumers understand what they are doing and be given 
a choice. But to dictate exactly how that is implemented, 
especially in a dynamically changing environment in technology, 
I think it is important to be careful.
    Senator Coburn. So what is wrong with what you just 
suggested, is you have an ability to opt out and then you have 
the ability to opt out of the opt-out question? What is wrong 
with that?
    Mr. Hyman. Fundamentally, I think that is fine, as long as 
you can get to the--you know, the way in which the process 
works, as long as----
    Senator Coburn. Let me say it again. I am going to give you 
consent, Netflix, to share my movies. And then when a movie 
comes up, do you want to opt out? Or would you like to not see 
this screen again for six months and let all your sharing 
continue in your opt-in? In other words, for those that want to 
share everything, do not send me the reminder.
    Mr. Hyman. If that is what consumers want the way in which 
we would implement it, I am fine doing it. I have a little bit 
of trouble having that being legislated because I think over 
time that may change. It may be that six months is not the 
right amount of time. Is it three months? Is it a year? Is it 
never for certain people?
    So in that sense, I think, from my perspective--I think the 
fundamental of taking a principle-based approach of consumers 
having control and consumers understanding what they are opting 
into or not opting into at their choice is the important thing 
that, you know, we as a people and you as legislators ought to 
focus on that fundamental.
    And then the way in which it gets implemented, because 
things change over time, given technology, given the way people 
share and change, that should be somewhat left to being 
implemented.
    Senator Coburn. OK, great point. Thank you, Mr. Chairman. 
Sorry I went over.
    Senator Franken. Not at all. I thought that was a very good 
line of questioning. I think it brought out a lot of great 
things, and we may not go to a second round because I was 
afraid that the Ranking Member would not be able to get enough 
time if he only got one round. But the Ranking Member went into 
a lot of great points, started early with an alcoholic husband 
who is afraid of his wife. I thought that was a good point. You 
might have a hangover and watch something his wife does not 
approve of. I thought that was a very good point.
    That is a joke. I was kidding.
    [Laughter.]
    Senator Franken. I think----
    Senator Coburn. I am just not old enough to appreciate your 
humor.
    Senator Franken. No, I do not think it is that. I think 
that was probably--I think that joke curved foul.
    [Laughter.]
    Senator Franken. But I think we do not need another round, 
but I think we--unless anyone wants to respond to a couple of 
observations I have here, because I think, Mr. Hyman, you said 
that it would not be buried in the terms of agreement, the 
ability to opt out. We do not know that. This piece of 
legislation does not say at all how opting out would work.
    Mr. Hyman. Actually, in 2471, there is a specific provision 
that was added in an amendment that said the actual agreement 
to share has to be separate and distinct from other legal and 
financial terms.
    Senator Franken. Yes, but not to opt out of the agreement.
    Mr. Hyman. Correct. The opt-out is not.
    Senator Franken. So that is the point. And you said that 
that would not be buried in the terms of agreement, and you 
talked yourself about how this is voluntary, and you were 
uncomfortable with that being in the law. This is voluntary 
because Netflix does what you do in Europe, but no other 
company would have to do it.
    So I think that you underscore the point that the Ranking 
Member was making, which is it could be incredibly difficult to 
find out how to opt out of this once you have agreed--once you 
are sharing everything. I see Professor McGeveran nodding his 
head. I wonder if you have any thoughts on that.
    Mr. McGeveran. I am just agreeing. The Nadler amendment 
that was passed in the House bill does set up some specific 
requirements for how the original blanket consent has to be 
effectuated, but the bill is silent about what will be required 
to withdraw that consent later on if you decided you did not 
want a particular movie to be shared with your friends or that 
you wanted to cancel the previous authorization. It just does 
not say anything at all about how that would happen.
    Senator Franken. Right, and, you know, I think that, again, 
Netflix in Europe, where it can, on the devices where it works, 
gives people a clearer way to do that, but less scrupulous 
companies under the law would not be required to do that, and 
you would have to go through the terms and conditions, which 
can be pages and pages long, which none of us except for 
Professor McGeveran actually read.
    Mr. Wolf. I read them, too, Senator.
    Senator Franken. OK, but they are privacy lawyers. Come on. 
No one reads those things. And I think that we almost got to 
the point of absurdity when--of course, you know, you do not 
have to be reminded that when you talk on your phone in public, 
we are not going to make it a law that, you know, someone could 
overhear you. And to reach for that kind of underscores, I 
think, sort of the common sense of if it is just as easy to 
click one button that says, ``I want to share,'' you know, 
``watch and share,'' as opposed to ``watch,'' it is no more 
burdensome to share each time on a one-by-one basis, as the 
original law claims, as opposed to having a consumer of a movie 
basically agree to sharing and then not be able to find where 
to opt out of that because it is buried in some place in the 
terms of agreement. No one has disputed that that is not 
written--that that is in the law to dictate that you can find 
it.
    So I want to work with the Ranking Member on this because I 
think he really got to the gist of this, which is that we have 
to find--when you mentioned 30 days or 60 days or six months or 
something like that, I think maybe you could find a thing where 
someone says, ``You know what? For the next 30 days, just share 
everything I like, and then remind me in 30 days,'' or 
something like that. I mean, I just think that this was kind of 
rushed through the Hous, maybe, and that we need to work on 
this----
    Senator Coburn. I am happy to work with you.
    Senator Franken. Great. OK. So I am going to adjourn, and I 
know I am--I do not chair that much, so let me find--the record 
will be held open for a week.
    [Laughter.]
    [Whereupon, at 11:30 a.m., the Subcommittee was adjourned.]
    [Questions and answers and submissions for the record 
follows.]


                            A P P E N D I X

              Additional Material Submitted for the Record

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     Questions for Christopher Wolf Submitted by Senator Tom Coburn
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                         Questions and Answers

    NOTE: At the time of printing, after several attempts to 
obtain responses to the written questions, the Committee had 
not received any communication from William McGeveran.

    NOTE: At the time of printing, after several attempts to 
obtain responses to the written questions, the Committee had 
not received any communication from Marc Rotenberg.

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