Federal Court Says It Is Illegal to Share Passwords to Online Services like Netflix, HBO Go

People who share their passwords for online services like Netflix and HBO Go could soon find themselves facing federal criminal charges. At least that’s the fear of some legal observers after a US Court of Appeals issued a ruling that subscription Video On Demand (VOD) providers are entitled to legal protection of their intellectual property and services.

The problem, of course, is that countless Americans swap their login credentials with friends and share access to a variety of online content services. This has allowed one person to pay a subscription fee and then provide their password to friends and family who can then access to the service without paying a dime. The practice of sharing passwords for these types of services has become so popular that Andy Samberg even made a joke about it while hosting the 2015 Primetime Emmy Awards.

While some people were making jokes, however, many of the providers of these VOD services were not laughing. According to a study conducted by Parks Associates, the providers anticipated losses of $500 million from password sharing and related content theft in 2015.

However, there is also data that indicates that the “problem” of password sharing for VOD services is not really a problem at all. According to a survey conducted by IBM Cloud Video in April 2016, just four percent of subscribers to online streaming services shared passwords with people outside their circle of family members.

Federal Court Ruling on Online Password Sharing

Now the U.S. Court of Appeals for the Ninth Circuit has weighed in on the matter of online password sharing for VOD services. In a 2-1 decision, the appellate court held that a former employee at Korn Ferry, a business advisory firm, could be prosecuted under the US Computer Fraud and Abuse Act by sharing passwords without authorization.

It is interesting that a number of VOD providers, including Netflix and HBO, have come out against the idea that password sharing by customers, paying or otherwise, is destructive to their business models. For instance, Reed Hastings, the CEO of Netflix, spoke at the 2016 International CES (Consumer Electronics Show) and said that the company “loves” it when people share their Netflix access information because it can lead to those individuals eventually deciding to become paying customers of Netflix.

Beyond that, Netflix actually provides subscribers with the option to assign as many as five different profiles to various family members, with these other people then having access to the subscriber’s Netflix movie streaming account.

For additional information, read the Variety.com article, “Sharing Netflix or HBO Go Password Technically Federal Crime Under 9th Circuit Ruling.”

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