Even though Netflix's CEO Reed Hastings doesn't mind that users share their passwords — the more eyes on its content, the higher the chance people will get hooked and get their own membership if need be — subscribers may want to think twice before giving away their account details to others.
The U.S. Ninth Circuit Court of Appeals issued a decision on July 5 that ruled that password sharing is illegal under the Computer Fraud and Abuse Act. This means that sharing your Netflix password could now be considered a federal crime ... well, sort of.
The ruling made is in regards to the case of the United States vs. David Nosal, which doesn't actually have anything to do with internet streaming. Nosal was a former regional director at the search firm Korn/Ferry International, and he left in 2004 after being denied a promotion. However, he continued to access information in the company's database using the credentials of other employees whom he recruited to help.
The appeals court ruled 2-1 that Nosal acted "without authorization" when using the login credentials that were not his after leaving the firm, which means he broke the federal law concerning computer fraud.
While Nosal was charged with conspiracy, theft of trade secrets and three fraud counts for breaking the Computer Fraud and Abuse Act (CFAA) and the Economic Espionage Act, with his sentence including jail time and about $900,000 in fines, Netflix users have nothing to worry about for now.
Hypothetically, the ruling could be applied to sharing a Netflix password, but the dissenting Judge Reinhardt wrote that the "CFAA does not make the millions of people who engage in their ubiquitous, useful and generally harmless conduct into unwitting federal criminals."
The case makes the 30-year-old CFAA law more confusing than ever, as there is no clear answer to whether or not using a roommate or family member's Netflix or HBO Go passwords is illegal or not — especially if the person has permission and the service provide itself has no problems with them doing so.
"The majority does not provide, nor do I see, a workable line which separates the consensual password sharing in this case from the consensual password sharing of millions of legitimate account holders, which may also be contrary to the policies of system owners," the judge wrote. "There simply is no limiting principle in the majority's world of lawful and unlawful password sharing."
So, what does this case mean if non-subscribers continue to borrow a Netflix login? Pretty much nothing as of now.
Chill out, viewers will not be going to jail for using someone else's Netflix. No one has been in legal trouble for using a Netflix login that isn't their own. In fact, the judges found that the case "bears little resemblance" to password sharing as it relates to streaming video content for the major platforms.
Even still, the ruling further opens up whether or not password sharing of this nature really does violate the CFAA law.
Source: Fortune
