Netflix Prize Canceled After Privacy Concerns

Netflix is a very popular DVD-rental service in the US, having become famous and profitable with its rent-by-mail service. Outside of the US, though, it's more likely that you'll know it from the $1-million contest it has run for the past few years, originally dubbed the Netflix Prize, encouraging researchers to best Neflix's own movie-recommendation algorithm.

The first challenge ended last year, but there was already talk of a second one. Those plans are now dead, as a lawsuit settlement concerning the contest made it impossible for the company to run a new one under the previous conditions.

"In the past few months, the Federal Trade Commission (FTC) asked us how a Netflix Prize sequel might affect Netflix members' privacy, and a lawsuit was filed by KamberLaw LLC pertaining to the sequel," Neil Hunt, chief product officer at Netflix, wrote.

"We have reached an understanding with the FTC and have settled the lawsuit with plaintiffs. The resolution to both matters involves certain parameters for how we use Netflix data in any future research programs. In light of all this, we have decided to not pursue the Netflix Prize sequel that we announced on August 6, 2009," he explained.

The concerns over a new contest/research program related to privacy are an increasingly thorny issue, especially online. As part of the challenge, Neflix gave researchers access to a big chunk of annonimized user data to test their algorithms on. However, as with all anonimized data online these days, there is doubt that it can truly be anonymous.

Several studies have shown that these data can be correlated and cross-referenced with other public or private data and the identity of the 'anonymous' users. The concerns are largely hypothetical when it comes to the actual Netflix data, but they were, apparently, enough to put a stop on the research program. This is a shame, as the program managed to spark the attention of plenty of researchers worldwide and it has been regarded as a great success.