Video streaming service Hulu wins dismissal of U.S. privacy lawsuit

By Jonathan Stempel

(Reuters) - Hulu won the dismissal of a lawsuit in which users accused the video streaming service of illegally violating their privacy by sharing their viewing histories with Facebook Inc (FB.O).

U.S. Magistrate Judge Laurel Beeler in San Francisco on Tuesday found no proof that Hulu knew it was sending user information to Facebook that, when combined with information collected by the social media company, showed which users watched which videos.

Hulu users claimed this activity violated the federal Video Privacy Protection Act, a 1988 law adopted a year after a newspaper wrote about movies rented by failed Supreme Court nominee Robert Bork, based on a list provided by a video store.

"This case is different," Beeler wrote. "The user's identity and that of the video material were transmitted separately (albeit simultaneously). By sending those two items Hulu did not thereby connect them in a manner akin to connecting Judge Bork to his video-rental history."

Ultimately, Beeler found "no proof that Hulu knowingly disclosed any user as having requested or obtained specific video materials or services." She dismissed the lawsuit with prejudice, meaning it cannot be brought again.

Hulu is a joint venture owned by Comcast Corp's (CMCSA.O) NBCUniversal, 21st Century Fox Inc's (FOXA.O) Fox Broadcasting, and Walt Disney Co's (DIS.N) ABC.

Users claimed that the information sharing, including through cookies, could allow marketers to target them with unwanted advertising, and even let Facebook friends learn their viewing preferences.

They sought damages of at least $2,500 per violation, plus punitive damages and other sums.

Scott Kamber, a lawyer for the plaintiffs, said his clients are disappointed in the decision and look forward to an appeal.

"The issues implicated are key to privacy rights on the Internet," he said in a phone interview. "The opinion undermines the express statutory protections provided by the VPPA."

Victor Jih, a partner at O'Melveny & Myers representing Hulu, said: "Hulu takes privacy very seriously and we are very happy it has been vindicated by the court."

The case is In re: Hulu Privacy Litigation, U.S. District Court, Northern District of California, No. 11-03764.

(Reporting by Jonathan Stempel in New York; Editing by Alan Crosby and Ted Botha)