Turns out some aspects of Beacon were/are probably illegal. Check out this analysis.
Another member of a professorial mailing list I’m on asked whether Facebook may have violated the Video Privacy Protection Act of 1988. Nicknamed the “Bork Bill” (a newspaper published his video rental records during his confirmation hearings), the VPPA protects your privacy in the videos you rent and buy. Well, guess what? One of Facebook’s Beacon partners was Blockbuster, so some of the items that wound up in people’s news feeds were the names of videos they’d bought. Oops.
I dug a bit into the legalities of the issue, and this is roughly what I came up with: Facebook and Blockbuster should hunker down and prepare for the lawsuits. Their recent move to allowing a global opt-out may cut them off from accruing further liability, but there’s probably an overhang of damages facing them from their past mistakes. I should note that this isn’t my usual area of law, so salt the analysis appropriately. Caselaw on the VPPA is thin, but there might be other rules of information privacy law out there that would significantly change the bottom line.