Netflix just announced that they will be canceling the second Netflix Prize contest due to discussion with the FTC and a lawsuit. Netflix's Chief Product Officer, Neil Hunt, issued the following statement on the Netflix blog:
About five months ago we announced that Netflix would sponsor a sequel to the Netflix Prize. We've given a lot thought to how to sponsor a contest that discovers more about the predictability of Netflix members' movie watching behavior while always ensuring we protect Netflix members' privacy.
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.
We will continue to explore ways to collaborate with the research community and improve our recommendations system so we can constantly improve the movie recommendations we make for you. So stay tuned.