Hulu has found itself in some legal hot water over a law that was enacted long before its business model was even conceived.
According to The New York Times, Hulu has been hit with a lawsuit filed in a California federal court over claims that it violates the 1988 law, the Video Privacy Protection Act. The Times, which obtained the court documents, says unidentified plaintiffs have called on the law in their suit, charging Hulu with violating their privacy by allegedly sharing their viewing history with advertisers.
Though it's not often cited nowadays, the Video Privacy Protection Act was designed to safeguard consumer rental records. Under the statute, rental companies are not allowed to share with any other parties what a person rents. Although the law initially centered on in-store rentals, Judge Laurel Beeler said on Friday that it allows for "new technologies for prerecorded content" to be covered, effectively putting Hulu in its crosshairs, according to the Times.
In order to share which videos users watched with advertisers, Hulu hired an analytics company, called KISSmetrics, according to the Times. That company then placed a cookie in each video to nab user names, location, and videos viewed. Hulu was even able to connect "the video content information to Facebook's personally identifiable user registration information," Judge Beeler said on Friday, according to the Times.
Advertising is the main way in which Hulu generates cash from its videos. The company also offers a premium service, called Hulu Plus, which costs viewers $8 per month. However, Hulu Plus still comes with ads.
Hulu offers a wide range of professional programming, including current season episodes of popular television shows "The Office" and "Modern Family." Hulu also includes some older films.
CNET has contacted Hulu for comment on the case. We will update this story when we have more information.