Netflix canceled its second $1 million Netflix Prize after privacy concerns from the FTC and a federal lawsuit alleging invasion of privacy and violations of the Video Privacy Protection Act. The Netflix contest challenged contestants to find a superior movie-recommendation algorithm from “anonymized” datasets that included movie ratings, date of ratings, unique ID numbers for Netflix subscribers, and movie information. In 2006, during the first Netflix Prize contest, researchers conducted a study that revealed if a person has information about when and how a user rated six movies, that person can identify 99% of people in the Netflix database. After productive discussions with the FTC over reidentification concerns which stemmed from this study, Netflix and the federal agency reached an understanding on how Netflix would use user data in the future. Netflix also settled the VPPA lawsuit. For more information, see EPIC: Reidentification.
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