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Sharing Netflix Passwords Makes You Federal Lawbreaker?

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By    |   Tuesday, 12 Jul 2016 09:25 AM

Sharing Netflix passwords or to any streaming service could be a criminal offense punishable under the Computer Fraud and Abuse Act – at least that's the way some read an opinion last week from the U.S. Ninth Circuit Court of Appeals in San Francisco, according to Fortune magazine.

The case hinges on the prosecution of David Nosal, who used the password of his former assistant at the headhunter firm Korn/Ferry International to help start his own executive search firm even though he lost computer access after leaving the company.

Prosecutors convicted Nosal for conspiracy, theft of trade secrets, and three counts under Computer Fraud and Abuse Act, noted Fortune. He was sentenced to prison time, probation, and almost $900,000 in restitution and fines.

The appeals court opinion backed federal prosecutors who charged that Nosal gained access to Korn/Ferry's computers "without authorization" and by using the current employee's password, violating the act.

That brought a dissent from federal appeals court Judge Stephen Reinhart, who complained that such an interpretation would make casual Internet users who share their passwords outlaws in the eyes of the feds.

"This case is about password sharing," Reinhart said in his dissent. "People frequently share their passwords, notwithstanding the fact that websites and employers have policies prohibiting it. In my view, the Computer Fraud and Abuse Act does not make the millions of people who engage in this ubiquitous, useful, and generally harmless conduct into unwitting federal criminals."

Variety reported last year that the research firm Parks Associates estimated that "illicit password sharing" to video on demand players used by Netflix, HBO and other Internet subscription providers could cost those companies up to $500 million globally in 2015.

The firm said that roughly six percent of U.S. broadband households use an over-the-top video service paid by someone living outside of the household.

"The trend of people freeloading off the Netflix or HBO passwords of paying subs has long been a question facing the industry …," said Variety writer Tom Spangler. "But Netflix, HBO and others have downplayed the impact of password sharing on their businesses."

Variety said that while Netflix's terms of use states that the primary account owner has "exclusive control" of the account, it also provides for up to five different profiles to have their own watch lists.

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Sharing Netflix passwords or to any streaming service could be a criminal offense punishable under the Computer Fraud and Abuse Act – at least that's the way some read an opinion last week from the U.S. Ninth Circuit Court of Appeals in San Francisco.
sharing, netflix, passwords
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2016-25-12
Tuesday, 12 Jul 2016 09:25 AM
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