Comcast Privacy Lawsuit Goes to Arbitration8 May, 2013 By: Doug McPherson
PHILADELPHIA – Comcast is breathing a sigh of relief. U.S. District Court Judge Robert W. Gettleman in the Northern District of Illinois granted the company's request to send a potential class-action privacy lawsuit to arbitration.
The ruling upheld a clause in Comcast's subscriber agreement that offers arbitration in any disputes with customers.
Two consumers – California resident Aaron Lloyd, who subscribed to Comcast's broadband service from 2008 through 2010, and Illinois resident Steve Bayer, who subscribed to cable service from 2006 through 2007 – brought the lawsuit. They say Comcast violates federal and state privacy laws by retaining customers' personal information – including names, Social Security numbers and financial account information – after they have canceled service. They argue Comcast has no reason to keep this personal information.
Part of their complaint read: “On information and belief, Comcast has not taken a single step toward shredding, erasing, encrypting or otherwise modifying ... [customers'] personal information so as to make it unreadable or undecipherable by others.”
Comcast says all customers get a welcome kit with a subscriber agreement giving the company the ability to have disputes decided by an arbitrator. The subscriber agreement sent to Lloyd also had a provision allowing him to opt out of arbitration, but only within 30 days of receiving the agreement. The subscriber agreement also bans class-action lawsuits.
Lloyd and Bayer unsuccessfully argued that the arbitration requirement shouldn't be enforced.
Netflix was sued several years ago for allegedly keeping users' names and their movie-viewing history after they canceled their memberships. The consumers who sued in that case argued that Netflix was violating the federal Video Privacy Protection Act, which says that video rental companies must destroy consumers' personal information within one year of cancellation of membership.
Netflix settled that case by agreeing to decouple former customers' names from their movie-viewing records. Netflix also agreed to pay $6.75 million to various privacy organizations and up to $2.25 million to the lawyers who sued the company.