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Privacy experts are warning Netflix to cancel its upcoming research contest, citing serious concerns over the company’s plans to hand over user data to contestants.  The contest, like the one held previously, asks contestants to develop technology that will help it better predict what movies a customer will like.  On Monday Netflix awarded $1 million dollars to the winner of the previous contest.

The concerns behind this contest revolve around the company’s plans to release test data to the contestants.  This data includes customer’s ages, zip codes, genders, and previous rentals.  Privacy experts say this information can easily be used to personally identify an individual.

“Researchers have known for more than a decade that gender plus ZIP code plus birth date uniquely identifies asignificant percentage of Americans (87% according to Latanya Sweeney’s famous study.) True, Netflix plans to release age not birth date, but simple arithmetic shows that for many people in the country, gender plus ZIP code plus age will narrow their private movie preferences down to at most a few hundred people.”

Netflix could face an FTC investigation or a lawsuit under the Video Privacy Protection Act.  They’ve had no comment on the controversy so far.

While I don’t think Netflix is purposely acting with disregard for its customers’ privacy, I do believe they may simply not understand that all customer data must be protected and kept private.  At the very least they need to contact their customer base and give them a chance to choose to have their information withheld from the contest.

Read [PCWorld]