According to a new ruling by the U.S. Ninth Circuit Court of Appeals, the sharing of passwords for widely used sites like Netflix, HBO Go, Amazon Prime and more is now technically a prosecutable offense under the Computer Fraud and Abuse Act (CFAA). The decision comes after a case regarding David Nosal, an ex-employee at headhunting agency Korn/Ferry, who continued to use his coworker’s passwords to access the private databases of the firm even after leaving the company in 2004.
Despite staying with the company for a year as a contractor after stepping down when he was denied a promotion, Nosal and several fellow collaborators were simultaneously in the process of attempting to start a competing employment agency, using stolen information from Korn/Ferry. Though his access to the company’s database was revoked following his departure, Nosal continued to use the login information of his old assistant to gain information about candidates within the established company’s files. Nosal has been given prison time, probation and been fined close to $900,000 for his offenses, which include theft, conspiracy and multiple CFAA violations.
Critics of the decision, including several dissenting opinions from a few of the appeals court judges themselves, point out that the ruling on Nosal’s case sets a dangerous precedent for the practice of “consensual password sharing,” criminalizing this mostly harmless act. Stephen Reinhardt, one of the dissenting judges, commented that the decision neglects to uphold the true intention of the CFAA, which is to prevent hacking, and makes petty offenses often engaged in by law-abiding citizens prosecutable.
The petty offenses Reinhardt refers to include the innocuous password-sharing that countless online streaming service users have partaken in. However, we wouldn’t be overly concerned about Netflix and their competitors cracking down on violators of the password-sharing rule, as Netflix CEO Reed Hastings has occasionally spoken out on the matter, stating that he views the practice as a positive thing socially, which allows Netflix to reach customers who might not ordinarily be willing to pay for the service.