Can’t Keep A Lid On Pandora’s Box (Or Online Listening Activity)

May I suggest you choose your Pandora stations wisely? Unless you want your Facebook friends to know how much you love the Spice Girls.

According to a federal court, online music streaming giant Pandora isn’t violating your privacy rights by posting your listening activity online. At least under a certain Michigan law.

In Deacon v. Pandora Media, Inc., the Court dismissed a class action suit against Pandora that claimed the company violated Michigan’s Video Rental Privacy Act (“VRPA”) by (1) making listeners’ Pandora profile information publicly available and (2) posting their bookmarked tracks and artists, stations, and recent activity on Facebook.

The VRPA is similar to the federal Video Privacy Protection Act (“VPPA”), which prohibits disclosure of video tape rental or sale records, except in limited situations. But the VRPA includes a wider class of media, such as books and sound recordings.

By its terms, VRPA only applies to “the business of selling at retail, renting, or lending . . . sound recordings”. By referring to dictionary definitions of selling, renting, and lending, the Court determined that Pandora’s model of streaming, playing, and deleting sound recordings falls outside of this scope.

According to the Court, Pandora doesn’t rent the music files because “to rent” requires exchanging something of value for the use of property. In this case, the Court wasn’t convinced that listeners pay for the streaming services or that they truly “use” the digital files. Pandora, and not its listeners, “use” the temporary files to facilitate streaming.

The Court determined Pandora doesn’t lend the recordings because “to lend” involves granting a temporary use of something on the condition that it be returned. Even if listeners could claim “use”, they never “return” the song because Pandora deletes the file from the listener’s computer once it plays.

And the Court rejected the claim that Pandora “sells” the songs, which involves giving up the property to another for something of value. Again, the court wasn’t convinced listeners provide consideration for the services. The Court also ruled that Pandora doesn’t “sell” the songs when it links to iTunes and Amazon stores where listeners may buy songs they heard. The Court found, instead, that Apple and Amazon sell the songs, not Pandora. Any referral fee Pandora receives isn’t enough to make Pandora a seller.

Pandora also pointed to the Copyright law to show it doesn’t rent, lend, or sell the sound recordings. Pandora’s license is limited to public performance of the recordings. Pandora’s terms of use explicitly prohibit listeners from “using” the digital files in breach of its license by forbidding copying or storing the digital files in any way. So, if Pandora can’t rent, sell, or lend the songs according to its license, then listeners can’t rent, buy, or borrow the songs. You know, since everyone complies with limits on their copyright licenses.