The July 5 decision by the Ninth Circuit Court of Appeals in San Francisco was for a specific case regarding an event in 2004. While it does pertain to the Computer Fraud and Abuse Act (CFAA), the case was about a company employee named David Nosal who worked for executive search firm Korn/Ferry. He left and then had two other Korn/Ferry employees download proprietary information for him. A third Korn/Ferry employee let others use her login info to access company information. Not quite like letting Aunt Phyllis use your password to watch Mad Men, right?
For some hard-to-understand reason, based on the facts as presented, the Ninth Circuit Court ruled in 2012 that what Nosal et al did wasn’t illegal because no one used sneaky technical means to access the data, they just logged in. Go figure. The more recent ruling by the appeal court of the same judicial circuit effectively said, “Nope, what they did was illegal.”
The aftermath of the publicity about the court decision was people flipping out and saying that sharing an account password anywhere, anytime was a federal crime. The panic grew to the point that not only did Slate try to clear up the confusion, but even urban-myth clearinghouse Snopes got into the act.
The Nosal case was about password sharing, but not for entertainment media. The Los Angeles Times quoted from Judge Stephen Reinhardt’s dissent on the appeal court decision, “I would hold that consensual password sharing is not the kind of ‘hacking’ covered by the CFAA.” The LA Times also mentioned that HBO chairman Richard Piepler and Netflix CEO Reed Hastings have said that password sharing isn’t a significant problem for their services
Snopes reached out to Netflix and received the following unequivocal statement: “Overall, Netflix members can create up to five profiles on each account and the only limit is on how many devices that can be used to access Netflix at the same time, which is by plans. The $11.99 plan allows four devices to stream at the same time; the $9.99 plan allows two. As long as they aren’t selling them, members can use their passwords however they please.”
In the real world today, that means you’re OK if you share your Netflix password with a few people — of course if you have a $9.99 plan and your buddy Harold is binge-watching Breaking Bad for the fifth time and Aunt Phyllis is still on Mad Men season 4, you might not get to watch anything yourself.
In future years, Netflix and other streaming services might not be so open. Some investment analysts see ending password sharing as a future “growth opportunity” for Netflix, according to Business Insider.
