Netflix, Inc. (NASDAQ:NFLX) is being sued by an in-the-closet lesbian mother for privacy invasion. The woman alleges that Netflix made it possible for her to be exposed when the company disclosed information about half a million of their customers as part of a $1 million recommendation engine contest.
The lawsuit (Doe v. Netflix) was filed in a federal California court. The lawsuit claims that Netflix violated fair-trade laws and federal privacy laws that protect video rental records. The lawsuit seeks $2,500 in damages for each of Netflix’s 2 million customers.
Contestants were given access to two major databases that included 100 million movies ratings, rating dates, movie information and unique ID numbers for each subscriber. There was about 50,000 Netflix contestants that used this information to come up with a recommendation algorithm. The contestants would be given a prize if they were able to improve the algorithm 10% better than the Netflix algorithm.
“Jane Doe” was the name filed on the lawsuit to protect the mother’s identity. She believes that ?were her sexual orientation public knowledge, it would negatively affect her ability to pursue her livelihood and support her family and would hinder her and her children?s ability to live peaceful lives.?
The Netflix contest ended this past summer when two teams got past the 10% improvement for the recommendation system. The prize money was awarded to a couple of AT&T researchers. A Netflix spokesman has not responded to the lawsuit yet.