A 1980s Video Rental Data Law Came for Movie Theaters. AGG Fended it Off.

Could an ‘80s Statute Strike Online Content in Retail?

During an era when people wore leg warmers with jeans and visited brick-and-mortar stores to rent videos to watch on their home Betamax or VHS machines (if you know, you know), the U.S. Congress passed the Video Privacy Protection Act (the “VPPA”) in 1988. The VPPA prohibits any “video tape service provider” from disclosing a consumer’s rental history or related viewing habit data without that consumer’s written consent.

No, you do not need to provide a physical video tape to fall under the VPPA. Courts have decided that delivering video for consumers’ viewing at home or in any non-public location counts.

In recent years, plaintiffs have reanimated the VPPA, with some success in the streaming and online video environment. However, in cases where customers sued movie theaters claiming that the theaters violated the VPPA by using the moviegoers’ ticket purchasing data to generate targeted advertising, two California federal judges dismissed cases claiming that the movie theaters had violated the VPPA. AGG’s Litigation team of David Marmins and Jordyn Simon successfully defended Alamo Drafthouse Cinema, the movie theater in one of these cases. Plaintiffs have appealed the case to the United States Court of Appeals for the Ninth Circuit.

The movie theaters have not denied that they collected personal data and used that data to target consumers. What interested the court was that the VPPA was meant to protect consumers’ privacy about what they watched in their own homes, not data about consumer activity related to purchasing tickets to participate in a public event such as watching a movie in a theater.

“Indeed, most movie theaters have collected this information and sold it to third parties, who use it to direct targeted advertising,” David and Jordyn explain in a May 7, 2024, American Bar Association Journal article on the VPPA cases. “So, if you have purchased a ticket online to see Barbie, you’ve probably seen ads for a variety of pink-themed merchandise or “I’m just Ken” T-shirts show up on your Instagram feed. However, that does not mean the theaters have violated the VPPA. To the contrary, courts are consistently holding that the VPPA is not intended to apply to movie theaters selling tickets online.”

However, where consumers do more than purchase tickets online, such as watch movie trailers, the movie theater operator may violate the VPPA by disclosing personally identifiable information regarding consumers who viewed movie trailers on their website, for example to third parties to create targeted advertising.

Could the VPPA apply to retail brands whose product is not video content, but who create content for TikTok, YouTube, and advertising platforms? The common law interpretation of the VPPA is evolving, but the answer right now is “maybe.”  Case law indicates that the VPPA reaches companies engaged in the business of delivering video content (these days, it seems like everyone is in the business of delivering video content) if its product is tailored to serve the purpose of delivering video content. The second prong protects many retailers; a burrito brand’s product serves the purpose of delivering delicious burritos, not video content. However, the VPPA has not been fully tested in courts, so AGG is continuing to monitor this statute’s reach.

More broadly, as data collection and sharing are increasingly prevalent across retail business lines, what other past statutes may be used in new ways, in addition to new and impending data privacy laws? AGG is keeping an eye out.

For more on AGG’s successful defense of Alamo Drafthouse Cinema, please click here.