US regulators have threatened the head of Netflix with legal action for posting information about the company’s performance on Facebook rather than through official channels. Netflix chief executive Reed Hastings announced on the site that monthly viewing figures had passed one billion hours in June for the first time. Shares rose after the posting. According […]
US regulators have threatened the head of Netflix with legal action for posting information about the company’s performance on Facebook rather than through official channels. Netflix chief executive Reed Hastings announced on the site that monthly viewing figures had passed one billion hours in June for the first time. Shares rose after the posting.
According to the Securities and Exchange Commission, when a company has important information to share, it has to make it broadly public. Also according to the SEC, a Facebook post may not be public enough.
The SEC is considering taking action against Netflix for a message Chief Executive Reed Hastings posted to his public Facebook page in July in which he bragged that Netflix monthly viewing exceeded 1 billion hours for the first time in June.
Hastings said he did not believe the posting constituted the kind of information that needed to be released in that way.
Netflix’s Facebook page has more than 244,000 subscribers to the page.
“We think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers,” he said.
Some commentators say this raises questions about whether the rules need to be adapted to keep up with companies’ use of social media.
If the SEC decides to penalise the company, it could be facing a fine.
