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You can now be prosecuted for sharing passwords, but you probably won't

Ruling makes password sharing a federal crime
Posted at 2:37 PM, Jul 11, 2016
and last updated 2016-07-11 19:46:24-04

A federal Appeals Court piracy case could have wide-ranging implications for the thousand, or maybe millions, of people who borrow a password to stream content on services like Netflix and HBO Go.

The ruling last week could make many people unwitting federal criminals.

If that’s a scary thought, that was exactly the intention of the judge who made the losing argument in the case against David Nosal, a man who was using his old company’s password to download secret information, according to Bloomberg News report. Nosal was convicted under the Computer Fraud and Abuse Act (CFAA); a panel decided he was basically hacking.

But a judge warned in this case that their broad interpretation of CFAA could basically make sharing a service password, like that of Hulu or Amazon Prime, a federal crime.

“A friend or colleague accessing an account with a shared password would most certainly believe — and with good reason — that his access had been ‘authorized’ by the account holder who shared his password with him,” wrote Judge Stephen Reinhardt. 

"In my view, the Computer Fraud and Abuse Act (“CFAA”) does not make the millions of people who engage in this ubiquitous, useful, and generally harmless conduct into unwitting federal criminals," Reinhardt wrote, adding, “people frequently share their passwords, notwithstanding the fact that websites and employers have policies prohibiting it."

Reinhardt’s suggestion that people who think they have authorization from a user but could still be breaking the law might sound terrifying, but it’s highly unlikely you’re going to get prosecuted. In fact, Netflix CEO Reed Hastings said at a media event Consumer Electronics Show in Las Vegas earlier in 2016 that “we love people sharing Netflix. That's a positive thing, not a negative thing." Hastings was referring to family members when he said “people.”

The ruling is also an interpretation by a judge, so it’s not clear the federal government would want to prosecute a son borrowing his father’s streaming passwords.

Companies that stream content often list rules of service with their products, making sharing a crime in some cases. But the new ruling could make sharing a federal crime, which would bring harsher penalties.