Netflix Passwords: Could Be a Federal Crime to Share

According to a court ruling on July 5, 2016, it is illegal to share your Netflix or HBO Go password. From now on, it is a violation of federal computer laws to do so.

It is very unlikely that anyone who shares a password to their streaming sites will go to jail or have to pay a fine.

According to the Los Angeles Times, David Nosal worked as a regional director of Korn Ferry International, an executive search firm. Nosal left the firm and secretly started his own business that competed with Korn Ferry. He provided his password and download instruction to someone working for him in his new company. Valuable information from Nosal's former company’s database was used in his new company.

The U.S. 9th Circuit Court of Appeals handed down a decision affirming that Nosal knowingly stole confidential secrets from a protected computer “without authorization.” This action is a violation of the Computer Fraud and Abuse Act and in violation of the Economic Espionage Act.

Even though video streaming sites had nothing to do with Nosal's case, Circuit Judge Stephen Reinhardt argued that the ruling could hypothetically lead to a precedent where anyone who shares a password could be construed to be in violation of the Computer Fraud and Abuse Act.

A three-judge panel of U.S. Court of Appeals for the 9th Circuit found that sharing passwords without the authorization of the system’s owner is a crime that could be prosecuted under the U.S. Computer Fraud and Abuse Act. Because of that ruling, millions of Americans unknowingly are committing federal criminals.

Also, because of the ruling, it is now illegal to engage in password-sharing. This could include logging into a Facebook account on behalf of a friend or relative. The Netflix password sharing is the most popular offense. In fact, Netflix encouraged customers to share their password with family and friends.

Netflix CEO Reed Hastings said in January at the 2016 International CES that sharing password has never been a significant problem before. He added that people who used someone else's account usually end up becoming a paying customer themselves. Hastings concluded, “We love people sharing Netflix whether they’re two people on a couch or 10 people on a couch. That’s a positive thing, not a negative thing.”

Research shows that password sharing is not at an alarming level. The result of a survey of 1,007 U.S. adults shows the following:

• A little over 4 percent of subscribers said they share their password outside their family circle.
• Another 42 percent say they share their password with family members.
• About half of millennials said they have used someone else’s password to watch Netflix.
• Those same millennials said they share their own password within the family circle.

According to Netflix’s terms of use, only the primary account owner is allowed to have exclusive control of the account, and the account owner should not reveal the password to anyone. However, the service is designed for sharing within a household. Besides, Netflix's customers can assign up to five different profiles to different family members. This means the family members can have their own personalized account and watch lists.

Even though the ruling is on the books, it doesn't mean people will go to jail because they still use someone's password. If you are concerned, you can read the official court ruling.