Video on-demand service Hulu will face a lawsuit brought by users who allege the company illegally shared their viewing habits with Facebook and market research company comScore.
In a hearing on Monday, the catch-up giant failed to have the privacy case dismissed now faces the prospect of paying out substantial damages if a San Francisco court rules in favour of users.
It is claimed that Hulu allowed marketers, advertisers and social networking companies to track the personal viewing habits of users and even provided the identifying Facebook ID the user registered with.
All this was done without the users' permission, according to the claimants representing Hulu users across the nation who are demanding compensation of $2,500 per user, per violation, plus other damages.
Multi-billion dollar liability
The privacy case is being debated under the 1988, Video Privacy Protection Act (VPPA), which was passed in order to protect the anonymity of video renters, following a 1987 newspaper article that exposed the rental history of a Supreme Court nominee.
Hulu argues that the privacy infractions are unfounded because the sharing of the information had not caused any personal injury to users. The judge, U.S. Magistrate Judge Laurel Beeler, rejected the claim.
A Hulu representative told the court that the VPPA "was not adopted to impose multi-billion dollar liability on the transmission of anonymous data where no one suffers any actual injury," but the claim fell on deaf ears.
Hulu will, once again, attempt to have the case dismissed at a hearing in February.