Sharing Netflix or HBO Go Passwords Is Now a Federal Crime

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( — July 14, 2016) — Under a court ruling last week, consensual sharing of passwords of private accounts is considered a violation of federal computer law.

In a case about David Nosal, a former employee at executive-search firm Korn Ferry, the court ruled that he can be prosecuted under the U.S. Computer Fraud and Abuse Act. Nosal used a company password to watch several movies after his credentials were revoked.

Ruling that Nosal committed a hacking crime, the three-judge panel of the U.S. Court of Appeals for the 9th Circuit, potentially made millions of American Video on Demand users into federal criminals.

“Different attempts to control Internet is commonly interpreted as a fight against piracy,” media analyst Ph.D. Divna Vuksanovic told Newswire.

“On the one hand, a legislature protects the capital and profit, especially in the entertainment industry. On the other hand, the matter is presented as a shield to protect the user’s interest, a democracy that enables participation of an individual in public domain, preventing the abuse of a third party. However, under this imaginary veil of civil rights protection, there is nothing but protection of corporation assets,” Dr. Vuksanovic said.

Unauthorized use off Netflix or HBO passwords of paying customers generated a loss of more than $500 million in revenue in 2015, Parks Associates research showed. However, major VoD companies dispute the necessity for such a law.

“I would hold that consensual password sharing is not the kind of ‘hacking’ covered by the [Computer Fraud and Abuse Act],” HBO Chief Executive Richard Plepler told BuzzFeed in 2014.

“We love people sharing Netflix whether they’re two people on a couch or 10 people on a couch,” Netflix CEO Reed Hastings said in January at the 2016 International CES. “That’s a positive thing, not a negative thing,” he added.

According to a survey conducted in April 2016 by IBM Cloud Video’s Clearleap division, a little over 4% of subscribers said they share their password outside their family circle, while 42% say they share it with family members. In the same report, half of millennials said they have used someone else’s password to try an SVOD service like Netflix.

Furthermore, according to Netflix’s terms of use, only account owners have “exclusive control” of their password, and the service is designed to be shared within the household. Still, judges have decided that sharing password is equivalent to hacking or bootlegging.