Privacy issues nix Netflix movie-picking contest

(AP) -- Netflix has canceled a sequel to a $1 million contest to improve its movie recommendations.

The DVD-by-mail service wants to avoid a legal showdown over the privacy rights of its subscribers. The retreat announced Friday was triggered by a lawsuit alleging that Netflix violated a federal law prohibiting video rental firms from publicly sharing their customers' movie preferences.

Netflix released millions of records on how its subscribers rated movies they watched in a 2006 contest aimed at improving its movie-recommendation system by at least 10 percent. No names were provided, but critics contend there was still enough information to identify subscribers.

The winning team received a $1 million prize last September when Netflix confirmed its intention to stage another contest.

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