August 3, 2016 By Wallin & Klarich

Could a law designed to prevent computer fraud unintentionally make criminals out of millions of Americans who use services such as Netflix and Amazon? That is precisely what one federal judge sees as the potential outcome of a recent ruling in the U.S. Court of Appeals for the Ninth Circuit.

“Criminalizing All Sorts of Innocuous Conduct”

The case, United States v. Nosal, concerned a violation of the 1984 Computer Fraud and Abuse Act (CFAA), which is a federal law that makes it a crime to engage in the unauthorized use of a computer or network. The law has been amended numerous times since its enactment, and in its present form, it is essentially an anti-hacking law.Computer_Internet_Crime-300x225.jpg

David Nosal’s case, however, was a little different than a typical hacking case. Nosal left his position at his company after he was denied a promotion. He decided to build a company to compete against his former employer. He and his associates began accessing the company’s databases by using his former assistant’s password.

Nosal was charged with conspiracy, theft of trade secrets, and three counts of computer fraud under the CFAA. He received a prison sentence, probation, and was ordered to pay $900,000 in restitution and fines.

Is It a Crime to Share Your Netflix Password?

For dissenting justice Stephen Reinhardt, the phrase “without authorization” is the one that is most troubling about the upholding of Nosal’s conviction. He notes that the sharing of a password is something that millions of Americans do each day.

“People frequently share their passwords, notwithstanding the fact that websites and employers have policies prohibiting it. In my view, the CFAA does not make the millions of people who engage in this ubiquitous, useful, and generally harmless conduct into unwitting federal criminals,” he wrote in his dissenting opinion.

Reinhardt’s worries are not baseless. People who have violated the “Terms of Service” that users are required to agree to before they can use many computer-based services have been prosecuted in the past. Whenever Netflix updates its Terms of Service, a user of its streaming service will be greeted upon logging in with a lengthy legal notice on-screen that explains the rules for how the service can be used. A subscriber must accept these terms by clicking the on-screen button before they can access the service. Even more problematic is that many people do not bother to read those terms before agreeing to them.

The CFAA’s penalty scheme is long and convoluted, and the punishments available are determined by the nature and number of violations. Penalties range from five to twenty years in federal prison.

Will You Be Charged with a Crime for Sharing Your Password?

Though the majority opinion of the court states that the appeal “is not about password sharing,” could Reinhardt’s prediction about the future of this law become true? It seems unlikely that we will suddenly begin seeing a number of people prosecuted for sharing their Netflix passwords, but it is now a possibility.

The top executives at companies such as Netflix and HBO have indicated that they do not intend to bring password sharing to the attention of authorities. In fact, the CEOs of both companies have expressed that they believe password sharing is a way to turn subscribers into non-subscribers.

“We love people sharing Netflix,” CEO Reed Hastings told the crowd at the Consumer Electronics Show in Las Vegas earlier this year. “That’s a positive thing, not a negative thing.”1

Similarly, HBO’ CEO Richard Plepler regards password sharing as a way to get new users hooked on their service, HBO Go. “We’re in the business of creating addicts,” he said.2

Should Password Sharing Be a Crime?

We want to hear from you about sharing Netflix passwords. Do you “share” Netflix or Hulu with someone else? Do you believe you have a right to do so? Should sharing your password be a crime? Please leave your responses in the comments section below.

1. Richard Nieva, “Netflix is cool with you sharing your account,”, January 6, 2016, available at html href=”#ref1″>↩

2. Matthew Lynley, “HBO’s CEO Doesn’t Care That You Are Sharing Your HBO Go Password,” BuzzFeed News, January 16, 2014, available at – .pj6vz1XG9. html href=”#ref2″>↩

Contact Us
  •   17592 Irvine Blvd,
      Tustin, CA 92780
  •   (714) 730-5300
  •   (888) 280-6839
SCHEDULE YOUR free consultation

If you or a loved one have been accused of a crime, this is the time to contact us.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2024 Wallin & Klarich - All rights reserved

California Criminal Defense Lawyer Disclaimer: The legal information presented at this site should not be construed to be formal legal advice, nor should it be considered the formation of a lawyer or attorney-client relationship. Any case results presented on the site are based upon the facts of a particular case and do not represent a promise or guarantee. The contents of this website may contain legal advertising. If you would like to find out more information about your particular legal matter, contact our office for a free telephonic consultation. This web site is not intended to solicit clients for matters outside of the state of California.