Netflix pays $9 million to settle Video Privacy Protection Act lawsuit with customers

On Friday, Netflix filed a document with the SEC that announces that it has modified its financial results for the fourth quarter of 2011, which wereб═reportedб═last month. The update to earnings is a result of Netflix settling a lawsuit with previous customers that deals with the Video Privacy Protection Act. The company has agreed to pay $9 million to settle the lawsuit without any further court meetings.

On February 10, 2012, Netflix, Inc. (the Б─°CompanyБ─²) filed its 2011 Form 10-K, which includes an update to the financial results for the year ended December 31, 2011 reported on the CompanyБ─≥s Form 8-K dated January 25, 2012. This update resulted from a legal settlement agreed to subsequent to reporting the CompanyБ─≥s 2011 results. Subsequent to January 25, 2012, the Company engaged in mediation of a legal claim pending in the Northern District of California made in January 2011 related to our compliance with the Video Privacy Protection Act. This mediation resulted in a settlement of the matter which includes payment of $9.0 million recognized as an expense in the Consolidated Statement of Operations for the year ended December 31, 2011, and which is anticipated to be paid in 2012. The settlement is subject to court approval.

Previous customers of Netflix claimed that the company held personal information about them even after they left Netflix. The Video Privacy Protection Act states that companies like Netflix are required to delete all personal information about former customers within a year of the subscriber leaving the company.

Netflix is debating with the United States Congress to modify theб═Video Privacy Protection Act in order to allow its subscribers in the U.S. to have certain integration features with Facebook. These features are already available to users in other countries, but not to those in the U.S.

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