Why it matters: The transfer of consumer data to advertisers has long been a source of controversy. Some lawsuits against the practice have attempted to use a law originally meant to protect everyone's videotape rental history, with the latest case taking the issue to the Supreme Court.
The Supreme Court has agreed to hear a lawsuit from a man alleging that using email credentials for targeted advertising violates a law passed in 1988 to keep consumers' VHS rentals and purchases private. The case could block a method by which advertisers acquire private data.
When Michael Salazar subscribed to the news outlet 247Sports through a newsletter by providing his email address while logged into Facebook, the outlet's owner, Paramount, automatically sent the information to Facebook for targeted advertising. Salazar claims that this violates the Video Privacy Protection Act of 1988 (VPPA), which forbids distributors of video content from disclosing what individual customers watch.
The law was passed after a journalist published a list of 146 VHS tapes that a judge had rented from a video store, having obtained the information from a cashier. Although the list, known as "The Bork Tapes," did not contain any embarrassing selections, it sparked alarm about the amount of personal information that was becoming publicly accessible.
Although the VPPA originally focused on physical videotapes, it also mentions "audiovisual materials," which presumably includes digital video. Furthermore, in 2013, President Obama updated the law to clearly define how streaming services can handle customer data.
The Salazar case hinges on the definition of a "consumer." Paramount claimed that, since 247Sports primarily publishes text articles, the subscription does not fall under the VPPA. However, Salazar's petition to the Supreme Court claims that he viewed video content through his subscription.
Lower courts disagreed on whether the VPPA covers all goods and services from a video provider, including a text newsletter, or only audiovisual materials. The Second and Seventh Circuits of the US Court of Appeals sided with Salazar, while the Sixth Circuit and the DC Circuit did not. SCOTUSblog reports that the Supreme Court is scheduled to hear the case during its 2026-2027 term. Annual terms traditionally begin in October.
Targeted advertising remains a controversial issue for tech giants despite years of litigation. Facebook recently found itself in hot water for knowingly making billions from fraudulent advertisers. Internal investigations led to actions against the scammers, who were advertising illegal gambling, pornography, and other inappropriate content, but CEO Mark Zuckerberg later halted the intervention.