updated 05:58 pm EDT, Tue July 31, 2012
Up to $2.5 million in attorneys' fees, $30,000 for named plaintiffs
The details of Netflix's $9 million lawsuit settlement have been revealed as letters to potentially affected customers have started going out. The settlement will see the streaming service making a series of donations to non-profit organizations, paying attorney fees, and paying out an incentive award to the Named Plaintiffs in the lawsuit. Attorney's fees could amount to up to a quarter of the total settlement, as well as additional costs for expenses.
Netflix will change its data retention practices in order to separate viewing history from information that could identify any customer who has not been a subscriber for at least 365 days. There will be some exceptions to this new policy.
Netflix will also pay $9 million into a settlement fund. Proceeds from that fund will go toward court-approved not-for-profit organizations, institutions, and programs. Proceeds will also pay for notice and settlement administration expense, and $30,000 will go to the Named Plaintiffs in the case.
The plaintiff's attorneys' fees will also be paid for by the settlement fund. The settlement allows for up to 25 percent -- or $2.25 million of the fund -- to go toward attorney fees, as well as $25,000 in expenses.
Earlier this year, Netflix revealed in a low-key SEC filing that the company had privately settled a lawsuit brought by customers who claimed Netflix had improperly retained their viewing records. Those customers had cancelled their Netflix subscriptions only to return later to find that the company still had their rental histories on record even though the Video Privacy Protection Act calls for such records to be purged in less than a year.
Persons who were current or former Netflix subscribers as of July 5, 2012, may have their legal rights affected by the settlement. Customers choosing not to take part in the settlement must do so by November 14, 2012, thereby keeping their right to sue Netflix regarding the claims in the lawsuit. Potential plaintiffs can find out more at the Settlement Fund homepage.