More Beacon Legal Woes?

Betsy Schiffman, writer for the Wired Epicenter blog, has revealed a possible law that was violated by Blockbuster’s participation in Facebook Beacon. According to James Grimmelmann of the Laboratorium blog, Blockbuster may be in violation of the Video Privacy Protection Act of 1988. According to the VPAA:

A video tape service provider who knowingly discloses, to any person, personally identifiable information concerning any consumer of such provider shall be liable…

Facebook’s new opt-out policy may protect them from future lawsuits but for now it sounds like they may have violated the law. This may have also been some of the reasoning behind Zuckerberg’s decision to enable users to completely opt-out of the program. All of the chatter in the blogosphere and mainstream media may not have been the only driving force.

I thought we may have heard the last of Beacon for at least a little while but it appears that occasional issues continue to sprout up. I wonder if Beacon has been doomed from the beginning or if it will survive and become a key component of Facebook. Do you think Beacon is doomed for failure?