More than a year after the US Federal Trade Commission slapped movie studio Sony Pictures with a $2 billion class-action lawsuit alleging that it illegally exploited its customers’ personal data, it appears that Hollywood is starting to get some answers about how it uses data.
On Thursday, the US Justice Department announced a new set of rules that allow for a class-wide investigation into how movie companies are using data to sell movies online.
The rules, known as the Digital Advertising Alliance Principles, would apply to all online advertising.
The move came after Sony, which makes “The Interview” movie, made its own allegations about its own practices in the film industry, which is expected to be the subject of another round of lawsuits.
The rules were first announced in December 2016 by US antitrust regulators, and they have since been expanded to include movie companies as well as social media companies.
Sony was one of a number of companies that were also sued in the case, and the company was eventually ordered to pay $5 billion in a settlement.
The lawsuit was filed by the Electronic Frontier Foundation and was eventually dropped, and its impact on the industry is unclear.
But some of the other studios, including Universal and Paramount, have argued that the rules are too broad.
And, after the news of the DOJ’s move broke, Hollywood’s own attorneys called the new rules “a sham.”
“The rulemaking is not meant to be comprehensive, it is not designed to protect consumers from predatory practices,” a letter from the lawyers reads.
“Rather, it aims to cover a small subset of movie industry practices, while allowing the entertainment industry to skirt FTC oversight for its other business practices, such as digital distribution.”
The DOJ’s rules would require companies to identify their data practices, and to disclose data about how consumers are using their data to make their online purchases.
In the new guidelines, they would also have to disclose the specific ways that movie companies have used data to deliver movies to consumers, which could include the types of ads or promotions that consumers receive.
The DOJ would also require companies, and any other businesses that share personal information with movie companies, to disclose any instances where they used data about consumers to drive their own sales.
But, for now, the rules only apply to movie studios.
The new rules also do not apply to social media platforms, which are more open about their data use practices than other businesses.
It’s unclear whether Hollywood would be able to use its data to help drive online ads.
For instance, it’s unclear if social media sites would be required to use the data in the new forms the DOJ requires.
What does it mean for movie companies?
The DOJ rules are intended to help movie studios better defend themselves against FTC action.
The agency could force them to change their business practices or take other actions that could lead to consumer boycotts.
The new rules would also be a boon for movie studios who would be forced to reveal their personal data to regulators, which will likely lead to a lot of data being leaked.
“As long as we’re dealing with a business, we should have a strong sense of who we are, and what we’re doing,” one industry analyst told Reuters.
Will the new rule change anything?
As long, the rule will not have a major impact on how Hollywood is using data.
But the new standards do create an important transparency tool for the entertainment sector, which already is under increasing scrutiny.
More to come on this story.
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