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"I've been trying to come up with ways in my own head that could justify the $15 Billion valuation that Facebook assigned itself during the Microsoft investment.  I think I've come up with a formula that closely approximates how Zuckerberg could have arrived at that valuation: the amount of liability accrued by signing up Blockbuster into the Project Bacn Beacon program. James Grimmelmann over at The Laboratorium today did some excellent legal investigatory work regarding exactly how Blockbuster and Facebook broke the law by making Project Bacn Opt-Out instead of Opt-In.\nAs it turns out, there's this thing called the \"Bork Bill,\" or the  Video Privacy Protection Act of 1988. The VPPA states:\nA video tape service provider who knowingly discloses, to any person, personally identifiable information concerning any consumer of such provider shall be liable\u2026 .\n18 U.S.C. \u00A7 2710(b)(1).  The important first question is who\u2019s a \u201Cvideo tape service provider.\u201D  That\u2019s defined in paragraph (a)(4):\n[T]he term \u201Cvideo tape service provider\u201D means any person, engaged in the business, in or affecting interstate or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials \u2026 .\nHere's the kicker, though.  James says that the law provides for a fine of $2,500 per offense. I did some back of the envelope math, doing some assumptions about Blockbuster's reported 1.6 million customers and Facebook's reported 57 million users. I pretended that using those two numbers, one could infer how many Facebook users rented a movie using the service and had their purchase broadcast for all to see without consent.  After carrying the one, and assuming all the users rented only a couple videos during that time, Facebook was into the liability column for billions already. This doesn't even take into account punitive damages and lawyers fees.\nDialing back the vim and vitriol a second, while we all may be more than eager to say \"See, Zuckerberg, we told you so!\", it is distinctly possible that Facebook et. al. looked at this law and thought they'd be getting away with it on a technicality.  The law has provisions for a \"marketing  exception.\" In subparagraph (b)(2)(D), the exception allows disclosures of the genres of movies you rent, if there\u2019s a \u201Cclear and conspicuous\u201D opt-out, and \u201Cfor the exclusive use of marketing goods and services directly to the consumer.\u201D\nJames thinks this fails on three counts; I concur on two:\n\u201CClear and conspicuous\u201D opt-out?  I don\u2019t think so, not if the opt-out pop-up disappears on you.Exactly.  This reminds me of the arguments in favor of spam in the mid-90s: \"We're not invading your privacy and inhibiting your enjoyment of the Internet! You can just hit the delete button, if you want!\"\nBeacon showed actual titles, not just genres.Exactly.  Genre  Title.\nMarketing to the consumer\u2019s friends is different from marketing \u201Cto the consumer.\u201DIn terms of how a corporation sees an individual, I think the term is interchangeable.  The term \"friend\" to the people at Facebook outside of the design and database team does not exist.  To them they are users and advertising inventory. What's more, the original intent of the law saw no such thing as social networks and distinctions between friends and consumers.  If you want to try and force the courts to re-interpret these matters, you might have some success depending on how liberally your judge wants to apply justice, but there's really not much need to go this route when Facebook and Blockbuster are clearly flouting the law on other matters.\n\n\n"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2007/12/11/facebook-and-blockbuster-liable-for-billions/>