In an announcement on their web site, he writes:
…. 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. With both the FTC and the plaintiffs’ lawyers, we’ve had very productive discussions centered on our commitment to protecting our members’ privacy.
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.
It’s unfortunate that it took an FTC investigation and a lawsuit to achieve this resolution, but I am glad to see that they have canceled the sequel and hope that their future contests reflect greater input from privacy and security experts as to how to accomplish their goals while protecting individuals’ privacy.
Taylor Buley of Forbes has more on these latest developments.