[HN Gopher] MoviePass settles FTC allegations that they limited ...
___________________________________________________________________
MoviePass settles FTC allegations that they limited usage, exposed
user data
Author : aarestad
Score : 291 points
Date : 2021-06-08 16:50 UTC (6 hours ago)
(HTM) web link (www.ftc.gov)
(TXT) w3m dump (www.ftc.gov)
| anticristi wrote:
| The analogy with Netflix's DVD-by-mail throttling is astonishing.
| Same fraud but "done with computers".
|
| https://en.m.wikipedia.org/wiki/Criticism_of_Netflix
| dwighttk wrote:
| Weird. I was using MoviePass right at the end and they didn't
| need to change my password, they just limited what movie and time
| I could use my card so much it stopped being worth the trouble.
|
| I guess they could have changed my password to keep me from
| canceling...
| Someone1234 wrote:
| If a private individual did the things set out here they'd be
| criminally liable. When a company executive orders employees to
| do these things, they're not facing any criminal complaint at all
| (any of them). See also Wells Fargo multiple thefts (both
| fraudulent accounts with fees, and literally entire homes/all
| possessions).
|
| It is pretty evident that many laws are constructed (e.g. CFAA)
| wherein there's one rule for individuals and a completely
| different rule for executives/companies.
|
| I understand that the FTC themselves cannot jail people. I don't
| understand why the justice department cannot.
| at-fates-hands wrote:
| I would also trot out ENRON as another example, on a much
| larger scale. The only person in the entire fiasco that
| actually did serious jail time was Jeffrey Skilling who was
| sentenced to 14 years and was released in 2019.
| SilasX wrote:
| Well, CEO Ken Lay might have done serious jail time as well,
| but he died before sentencing:
|
| https://en.wikipedia.org/wiki/Kenneth_Lay#Enron_bankruptcy_a.
| ..
|
| Edit: Given the really suspicious timing, and how the death
| vacated the conviction, "died".
| legitster wrote:
| IANAL, but it seems like the AG is still well within their
| power to press charges and consumers are still free to pursue
| class action.
| bdcravens wrote:
| What damages could customers seek? Presumably not much more
| than the cost of the service, which was only around
| $20/month.
| Matticus_Rex wrote:
| Those are the compensatory damages, but punitive damages
| might be appropriate here on top of those.
| slg wrote:
| One of the problems is that they were selling $100 for $10.
| I was a user and got more than my money's worth out of
| MoviePass including the months they committed these abuses.
| However I could have gotten even more value out of them
| without these moves. How would you even quantify those
| damages?
| legitster wrote:
| I don't know - I've been part of class actions where the
| settlement was much, much higher than than the cost to me.
| So I think it depends.
|
| Hard to see that working here with a completely bankrupt
| company.
| canadianfella wrote:
| I don't see why your sexual activities are relevant.
| Kinrany wrote:
| I wonder if a general purpose legal framework of applying the
| same punishment to different types of entities is possible.
|
| That way most laws could be worded in a way that applies to
| private individuals and all types of companies the same way,
| but then the actual punishment would be applied differently.
|
| Specifically, when a company breaks the law, the legal
| framework would explain the way the responsibility should be
| shared between the legal entity and the private individuals
| involved in breaking the law.
| ocdtrekkie wrote:
| I am frustrated that we continue to have the death penalty
| for individuals that commit heinous crimes, but we do not
| have the death penalty for corporations.
|
| I feel like when you manage to harm a billion people at a
| time, the penalty should be that your company is dissolved,
| it's assets auctioned off, and the trademarks and domains
| blackholed.
|
| And then, since I don't support the death penalty for
| individuals, the C-levels investigated for their knowing
| involvement in any related schemes, and if proven aware,
| given prison time and forbidden from ever operating in a
| management capacity at any corporation ever again.
|
| The problem with corporations is that there is no meaningful
| disincentive to commit crimes. You succeed, you get rich. You
| fail, you take your severance, live like a king for a year,
| and then get hired to do the same at another company. If
| executive pay is going to come with outsized pay, it should
| come with outsize risk: Jail executives for their choices
| when running corporations. For the millions they make,
| they'll still be lining up for the job.
| stickfigure wrote:
| MoviePass is already dead.
| kbenson wrote:
| I have some complicated feelings on this, because on the
| one hand it really makes sense to punish these people and
| companies and stop this behavior from continuing, and on
| the other it would suck to be some low level worker and
| have some bullshit from a CEO cause you to immediately lose
| your job, and it would also suck as a customer of some non-
| screwy service of the company to have something you rely on
| forced to stop.
|
| Perhaps a complete replacement of all upper level
| management over 6 months and possibly a moratorium on board
| involvement for a time period for board members if it was
| bad enough would be sufficient? In the "a corporation is a
| person" analogy that's about the same as some other mind
| taking over the body, so that might be sufficient. You
| might have to have some laws that provide some bite for
| people that want to just jump ship immediately knowing
| there severance is in danger even if they stay, but it's
| not like what I'm proposing could happen without new
| legislation anyway.
|
| As long as the payment of severance was handled by new
| management explicitly, and all replacements happened under
| explicit notice that the prior employee was being removed
| for compliance in an illegal activity (so they could fight
| against paying the severance), I think that would be a
| fairly good deterrence of bad behavior, since it would
| affect both employment of themselves and others, it has a
| good chance of affecting payouts when fired, and it
| effectively wipes the slate clean while doing what it can
| to preserve services and employment for as many as
| possible.
| ocdtrekkie wrote:
| > to be some low level worker and have some bullshit from
| a CEO cause you to immediately lose your job
|
| Possibly, but this government action could automatically
| trigger unemployment benefits (paid for by all the money
| the government just seized from corporate coffers), the
| vacuum created would probably quickly be filled by
| expanding competitors who would hire people from the
| executed company, and considering the intersection of
| "companies that commit mass abuses" and "companies that
| treat their low level employees like garbage", it's
| likely that the low level employees would come out ahead.
|
| If say, Amazon disappeared today, people's desire for
| stuff would not disappear, and other companies would have
| to hire to fill that void. (After probably buying the
| warehouses and trucks at auction.) Most of those
| companies don't have employees peeing in bottles.
|
| > Perhaps a complete replacement of all upper level
| management over 6 months and possibly a moratorium on
| board involvement for a time period for board members if
| it was bad enough would be sufficient?
|
| But a huge part of the issue is also regarding public
| companies, shares, and stock value:
|
| A big issue I have is with founders. Jeff Bezos, Larry
| Page, Sergey Brin, Mark Zuckerberg, are all de facto
| still in control of their companies, even in the cases
| where they've "stepped back", because of their
| shareholder power (and dual-class shares, which I am
| still shocked is legal). And they're still wildly rich
| because of it. The C-level folks we're talking about,
| generally all hold a ton of company stock. If we accept
| that a given company has committed mass harm, and that
| the founders and C-level folks were complicit and
| knowing, their stock values need to be literally zeroed
| out.
|
| The effect of this issue applies to stockholders too:
| They'll happily keep investing in bad companies because
| those bad companies make money and don't see any
| meaningful penalties. We have to destroy bad companies,
| make their stock worthless, so that the risk of that is
| factored properly into stock values.
| kbenson wrote:
| > Possibly, but this government action could
| automatically trigger unemployment benefits...
|
| I like this in a perfect world, but I think in reality it
| causes too much disruption, and not a type that's
| beneficial for consumers in the short run. Normally that
| doesn't matter, but sometimes it does. If AT&T is wiped
| out tomorrow, that's a lot of people losing their phone
| and/or internet service all of a sudden, and for many of
| those people their primary contact for ordering goods and
| services, or how they get emergency service access (911),
| etc.
|
| What about Walmart? Walmart has eaten up the normal
| vendor market in large chunks of America. If Walmart was
| closed tomorrow, it would take a while for people to set
| up something to serve all the rural people that go there
| as their primary location for groceries, supplies,
| clothes, tools, etc. I imagine in a lot of places
| groceries would be _sparse_.
|
| Once you get into things that are even more like
| utilities, it gets even more problematic. Private
| companies that act as utilities, like natural gas truck
| delivery?
|
| I think there are lots of reasons and possible unforeseen
| problems with just wiping out a company. I think
| beheading the company and grafting some other head into
| place might alleviate those problems. At best, it's
| ensuring the problematic decision makers are gone and the
| the company can try to survive with the resources it has
| (whatever wasn't fined away) and the employees have time
| to plan and jump ship if it's still bad or benefit from
| better management, and at worst is a slower death which
| allows for the market to take over more naturally.
|
| > A big issue I have is with founders. Jeff Bezos, Larry
| Page, Sergey Brin, Mark Zuckerberg, are all de facto
| still in control of their companies
|
| Yeah, and that's why I think it might also require
| special provisions on boards and or managers that have
| stock. Maybe an inability to sell or exercise voting
| rights for a period (those would be some interesting
| votes, where the majority shareholders can't
| participate).
|
| > We have to destroy bad companies, make their stock
| worthless, so that the risk of that is factored properly
| into stock values.
|
| That's one of the reasons I think we shouldn't go that
| far. What employee is going to blow the whistle when it's
| not just hard times for their company, but when they know
| they may be responsible for putting 30k people out of a
| job? At certain points, punishing too hard can have
| perverse incentives. We want people to come forward. We
| want people to think that this might be hard, but it's
| possible to weather it and eat the bitter medicine and
| come out the other side either better or at least still
| alive.
|
| And for regular stock holders, this is way more
| complicated. Do we want to punish regular people that
| happened to have some of that stock but didn't have any
| inkling of what was going on? What about all the people
| that get advance notice and sell so they reaped the
| benefits of the high stock but avoid the drop on bad
| news, and the possible immediate loss (which the buyer
| unfortunately would get both of). Going back in time to
| revert sales just doesn't seem feasible to me, both
| because of how that may cascade for other stock bought
| with the profit, and because how do you tell when the
| cutoff is?
|
| I think there's too many possible unforeseen problems
| with just stopping the company. I mean, there's also a
| lot with lopping off the head and replacing it, but by
| it's nature less, I think.
| [deleted]
| papito wrote:
| Corporations are people!*
|
| * until a crime is committed
| Black101 wrote:
| Everyone should get a corporation at birth, and all actions
| done by that individual should be done for that corporation.
| Maybe things would change then.
| gruez wrote:
| That doesn't work. https://en.wikipedia.org/wiki/Piercing_t
| he_corporate_veil#Fa...
| Black101 wrote:
| So you would need to use your sibling's and/or friend's
| corp?
| ardit33 wrote:
| Thanks Obama for this. He went full on corporate... and of
| course Trump and Biden are the same. In both Clinton and Bush
| eras (both Bushes), there was more pushback on some of these
| behaviors.
| [deleted]
| cobrabyte wrote:
| How this isn't a criminal case is beyond me. The dissenting
| judge is correct: if there is no monetary penalty, what's the
| point of the judgment?
| Chris2048 wrote:
| If corps are people, maybe they should receive jail sentences
| as such - and then their executives & beneficial owners can
| carry them out based on liability. A CEO that takes full
| control and makes a one-man-shop would therefore be fully
| liable for any sentence received, and can only avoid this be
| sharing control.
| gogopuppygogo wrote:
| No one would run or invest in a company within a country with
| such a law. It's basically a global world. Anyone intelligent
| would leave.
| leesalminen wrote:
| So if I were to own 1 share of $AMZN, I'd be criminally
| liable for anything the corporation does? Would I do 10
| minutes in jail or something?
| idiotsecant wrote:
| Clearly this is meant to be silly but if we take it
| seriously -
|
| Why shouldn't those who stand to benefit from ill-gotten
| gains be those who suffer the pain when the company breaks
| the law? At least in a proportional way? If, for example, a
| felony conviction of a company for fraud incurred a penalty
| of 10% of the value of the company stock for all
| stakeholders it would align market price with shadiness of
| company executives. It would suck getting burned by an
| executive doing something nefarious you didn't know about
| but it wouldn't take many events like that to make some
| very powerful people very interested in ensuring that
| ethical leadership was in place.
| DoctorOW wrote:
| I don't think you're liable for any of Amazon's decisions.
| Maybe if you voted yes on "Engage in crime" but the
| decisions of executives are their own.
| leesalminen wrote:
| That makes more sense. Maybe I was reading into the
| parent's use of the term "beneficial owners". Every
| shareholder of a public corporation is a "beneficial
| owner".
| 6gvONxR4sf7o wrote:
| That actually seems like a great idea. Not 10 minutes of
| jail time, but some form of liability. If orgs are
| incentivized to increase shareholder value, and those
| shareholders face no liability for wrongdoing done to
| increase their assets worth, then the incentives are out of
| whack. I don't know what kinds of liability makes sense,
| but some form seems like a great idea.
|
| If you own one share of amazon, and it gets some penalty,
| then you face 0.00000002% of that penalty in some way.
| anonymousab wrote:
| Make it actual jail time, and for the company itself.
|
| No monetary flow, no work being done, no contracts
| honored, restricted and slow (if any) access to assets,
| etc.
|
| Would it be traumatic? For sure. Potentially "life-
| ruining" for the company and the people close to it?
| Sure. Just like jail and prison are for regular people.
| sixothree wrote:
| Charge them $15 for a 10 minute phone call while we're at
| it.
| heavyset_go wrote:
| While in corporate jail, they can also be contracted to
| perform labor for less than a $1 an hour like human
| prisoners are in the US.
| sixothree wrote:
| Did you perform or direct someone to commit an illegal act?
| jellicle wrote:
| Perhaps people should. There's no intrinsic reason why a
| system must exist where certain kinds of enterprises can be
| FUNDED by me, I can receive PROFIT from them, but I cannot
| receive any CONSEQUENCES from them if they commit crimes.
| One might even say the system encourages the commission of
| crimes and therefore is clearly in need of reform.
| ta988 wrote:
| Then company ability to distribute dividends should be
| restrained if they engaged in criminal actions.
| dec0dedab0de wrote:
| I used to argue for exactly this. The thing is that people
| would only invest in companies with executives they
| personally trust. Which may be a good thing overall, but
| would be a big problem in the short term.
|
| I definitely think board members and Top executives should
| be held criminally liable for the actions of the company.
| Unless they can prove it was a specific bad actor, and that
| their policies didn't encourage illegal behavior, and that
| they weren't negligent in discovering and stopping said
| behavior.
|
| That is, if a delivery driver crashes his car because he
| was drinking on the job then that is on him. If the same
| delivery driver is speeding because he was given a list of
| deliveries that were not possible to make on time, that is
| on the executives. Conspiracy to break the speed limit,
| maybe even RICO charges. Even for something that simple.
| nathancahill wrote:
| > maybe even RICO charges
|
| Paging @Popehat...
| curryst wrote:
| > Unless they can prove it was a specific bad actor, and
| that their policies didn't encourage illegal behavior,
| and that they weren't negligent in discovering and
| stopping said behavior.
|
| Asking someone to prove a negative is almost impossible.
| Asking them to disprove 3 is crazy. The prosecution
| should have the responsibility to demonstrate that the
| company had a systemic issue that was causing illegal
| behavior, either as a result of intentional pushes by
| someone with control, or as a result of wilful or
| reckless negligence.
|
| How do you prove your policies don't encourage illegal
| behavior? The only way I can think of is to remove or
| invert the policy and demonstrate that illegal behavior
| is unchanged or potentially higher with the reversed
| policy. Which, incidentally, would be a violation of the
| law itself. Without an intent component, well-meaning
| policies that accidentally increase illegal behavior
| become illegal. Add driver tracking software to ensure
| people don't speed, but because of poor design the
| drivers fidget with it while driving? That's a violation.
| The counter-side is that adding intent makes it much
| harder to prosecute.
|
| > and that they weren't negligent in discovering and
| stopping said behavior.
|
| Again, how do you demonstrate that you _weren 't_
| negligent? Hind-sight will almost always show that there
| was something you could have done to prevent an incident.
| Someone will have to create some kind of criteria for
| determining whether an action/inaction is negligent or
| not. It makes far more sense to have the prosecution
| demonstrate that you were negligent by failing to meet
| such and such criteria than for you to go on a rambling
| speech about what you did do, and then let the
| prosecution pick something arbitrary that you didn't do.
|
| Just imagine that you're driving down a dark, unlit,
| windy country road. You come around a bend, there's a
| person crossing the road in all-black and you hit them.
| In court, you are then asked to demonstrate that you
| weren't negligent. Even if you were following the law,
| with the benefit of hindsight there are of course things
| you could have done. You could have driven slower;
| visibility was low. Maybe you shouldn't have been driving
| late at night; if you had just woken up, maybe a split-
| second in reaction time might have made a difference.
| Maybe if you had been scanning a little wider you would
| have seen them on the other side of the bend as you were
| coming up. Now you have to justify why you made each of
| those decisions, and any slip-up is a guilty sentence.
|
| Other than that, I'm on board. I just don't like pushing
| the burden of proof onto the accused. It's an end-run
| around the 4th Amendment. It makes the right against
| self-incrimination pointless, because refusing to testify
| makes you guilty and lying is a crime.
|
| It also significantly increases the power imbalance
| between prosecution and defense. It costs the government
| almost nothing to prosecute; they don't have to prove
| anything, so they don't need any investigators or
| evidence. All those costs are shifted on to the
| defendant, whose costs have just gone up an order of
| magnitude. The defendant used to need enough evidence to
| refute a single material point in the prosecution. If the
| prosecution says I was negligent because I failed to meet
| X requirement, I just need to prove I met that
| requirement or that it doesn't apply to me. If I have to
| prove I wasn't negligent, I now have to prove that I meet
| all the requirements. If I fail to pay for enough lawyers
| to prove each point, the prosecution can simply point to
| that one as the one I failed.
| yupper32 wrote:
| "Unless they can prove it was a specific bad actor"
|
| That's the opposite of the entire basis of the US
| criminal justice system. Innocent until proven guilty.
|
| You need to prove it was them. Not have them prove it was
| another bad actor.
| 8note wrote:
| Youve already been proven guilty by that point
|
| If you can prove somebody else was fully responsible, it
| goes to them
| mlyle wrote:
| No, it's not. There are affirmative defenses: things that
| can excuse you from criminal liability if you prove a
| certain set of facts.
|
| For instance, self defense is generally an affirmative
| defense: something that the defense must prove to avoid
| conviction, instead of something the prosecution must
| disprove.
| jedberg wrote:
| In this case then nothing would happen, because the "person"
| is "dead". We need some framework for holding actual people
| liable for the actions of corporations they control.
| notyourday wrote:
| > If corps are people, maybe they should receive jail
| sentences as such - and then their executives & beneficial
| owners can carry them out based on liability. A CEO that
| takes full control and makes a one-man-shop would therefore
| be fully liable for any sentence received, and can only avoid
| this be sharing control.
|
| Not shareholders but the officers and directors of the
| company. We already have this for financials under Sarbanes-
| Oxley Act of 2002. There was lots of whining that they could
| not possibly sign off on it because the financials are too
| complex and with personal criminal and civil liability for
| CEO/CFO there would be no CEOs/CFOs that would take it. Act
| got passed and, as if by magic, CEOs and CFOs decided that
| taking personally the criminal and civil liability was OK.
| paulpauper wrote:
| This is a joke. fraud is fraud. Civil penalties are not a good
| deterrent
| cobrabyte wrote:
| I agree, but they weren't even penalized, so there's zero
| deterrent. It appears the court took into consideration that
| the company is bankrupt but failed to see the apparent
| criminal action taken by the company and CEOs.
| legitster wrote:
| This was not a court ruling. The FTC is a regulatory body,
| not a judicial one. It is up for prosecutors to make a an
| actual criminal case.
| leephillips wrote:
| In regard to financial institutions getting away with crime, a
| former SEC commissioner became exasperated that this had become
| US government policy by 2015:
|
| "the latest series of actions has effectively rendered criminal
| convictions of financial institutions largely symbolic."
|
| https://www.sec.gov/news/statement/stein-waivers-granted-dis...
| telchar wrote:
| That link is both very damning and very succinctly
| informative of the problem.
| makotech222 wrote:
| Congrats, you've discovered: "Dictatorship of the Bourgeoisie"
|
| About 150 years late, though.
| swiley wrote:
| This is what the chargeback feature of credit cards is for.
| legitster wrote:
| > First, according to the FTC, MoviePass's operators invalidated
| subscriber passwords while falsely claiming to have detected
| "suspicious activity or potential fraud" on the accounts.
| MoviePass's operators did this even though some of its own
| executives raised questions about the scheme, according to the
| complaint.
|
| I'm going to go out on a limb and say the only reason the FTC was
| able to establish intent was because someone complained via email
| or text.
|
| I try not to think about how much illegal activity like this
| happens all the time that is not prosecutable just because
| everyone with a modicum of morals was smart enough not to say
| anything on record.
| judge2020 wrote:
| Yep - i'd be surprised if even a tenth of all white-collar
| crime is known about.
| phkahler wrote:
| I thought white-collar crime was usually a person scamming a
| company. This is a company scamming their customers, which I
| think happens far more than 10x what we hear about.
|
| Way back in the 90's I had a bank account that paid something
| like 5 percent interest, but only had a couple thousand
| dollars in it (maybe). I was between jobs and made no
| deposits for over a month - only withdrawals and only like 4
| of them. I got to wondering about the interest and calculated
| it various ways. Calling the bank, they confirmed verbally
| that they use the average daily balance. By my calculations
| they exactly used the final balance (the minimum for the
| month). I concluded that someone somewhere realized that
| changing from "average" to "minimum" would make the bank a
| few extra bucks. Not a big difference if your balance is
| fairly stable, but a big deal if it's more volatile. They
| eventually got bought out a couple times, and interest rates
| are a joke now anyway.
| bregma wrote:
| > I thought white-collar crime was usually a person
| scamming a company.
|
| You thought wrong. White-collar crime is effectively any
| crime that does not involve physical effort. Breaking and
| entering to steal a few dollars can get you months in jail.
| Pumping and dumping a stock can get you a sports car and a
| holiday home in the Cayman Islands.
| mshroyer wrote:
| > I thought white-collar crime was usually a person
| scamming a company.
|
| That's not my understanding of the term "white-collar
| crime", nor is it the definition used here, for example:
| https://en.wikipedia.org/wiki/White-collar_crime
|
| The interest calculation problem you describe would fall
| under what I think is the usual definition of "white-collar
| crime".
| lotsofpulp wrote:
| Being able to converse in person off the record is one of the
| big value propositions of being in the bigger cities.
| rdtwo wrote:
| I think that's why folks with morals complain in writing. Folks
| with soft morals complain via phone call
| kevin_thibedeau wrote:
| You see this in the evidence of the Arizona lawsuit against
| Google. They have internal emails from Googlers who dared to
| complain about the confusing settings for location tracking
| (How many still work there?). Nothing from the managers who
| cooked up the scheme.
| cs702 wrote:
| It appears the MoviePass master plan for world domination was
| inspired by the underpants gnomes of South Park[a]:
|
| Step 1. Charge customers $10/month for unlimited passes to movie
| theaters
|
| Step 2. Change passwords to prevent customers from getting their
| passes
|
| Step 3. ???
|
| --
|
| [a] https://www.youtube.com/watch?v=tO5sxLapAts
| kingaillas wrote:
| Matt Levine's summary in his current newsletter is this:
|
| "So at some point the company looked for ways to make this
| insane business model work, and it found one. It's pretty
| simple: What if MoviePass collected your $10 each month and
| then, when you asked it for movie tickets, it ignored you? Then
| it could keep collecting your $10 a month without spending
| money on tickets. Eventually you'd get annoyed by not getting
| what you paid for, and you'd try to cancel your membership and
| get your money back, but MoviePass could ignore that too and
| keep collecting the $10. Giving people unlimited movie tickets
| for $10 a month is a good way to get rapid customer growth;
| telling people you'll give them unlimited movie tickets for $10
| a month, but not actually doing it, is a way to pivot to
| profitability."
|
| And the way they ignored you was even worse - changing the
| passwords on their highest volume users.
|
| Anyway, it's a great read. Subscribe, it is a fantastic free
| newsletter. Past awesome coverage included the RobinHood stock
| hijinks. (Bloomberg's Money Stuff newsletter, sub here:
| https://www.bloomberg.com/account/newsletters/money-stuff)
| Chris2048 wrote:
| But if that where the case, they could just recover their
| passwords? From the sound of the "suspicious activity" line, it
| seems they may have been blocked?
|
| Also, I wonder how the corp avoided chargebacks
| richardwhiuk wrote:
| Also relevantly: https://www.youtube.com/watch?v=YBO_7UezpbY
| arbitrage wrote:
| okay, but like ... don't we sign away any right to care in the
| T&C/EULA of services? or like when you go to a baseball game,
| this ticket can be revoked at any time for any or no reason.
|
| like, it's their company and service, they can do what they want
| with their data. why is the FTC getting involved here?
| lacraig2 wrote:
| Amazing. Makes me glad I signed up with PayPal.
|
| Near the end there so many people were cancelling that if you
| used a credit card they would, without your consent or
| interaction, start your service up again.
| https://www.mentalfloss.com/article/559352/moviepass-reinsta...
| vmception wrote:
| > will be barred from misrepresenting their business and data
| security practices
|
| Bahahahahahaha I need that lawyer
| question000 wrote:
| Yes PNC Bank also does this, I bet they have hacks that they
| don't want to disclose and just want to smooth over the problem.
| smaili wrote:
| Couldn't users just go through the reset password flow or did
| MoviePass disable that as well? Not saying this isn't bad just
| trying to understand how far MoviePass went to stop users.
| [deleted]
| ivan888 wrote:
| Not sure, but I would be happy if this case was brought even if
| users were still able to reset their passwords to access the
| service. This would mean that the FTC takes dark patterns that
| attempt to prevent a customer's rightful use of a service
| seriously.
|
| If MoviePass had concerns about losing money on customers who
| had not violated any terms, the right thing to do would be to
| re-evaluate their plans/pricing.
| bredren wrote:
| Sounds like the FTC has drawn a hard line on dark patterns.
| Hopefully, they wake up to other deceitful, anti-consumer design
| patterns.
| Leary wrote:
| I signed up for Moviepass the month they came out.
|
| Canceled the month they started to have blackouts.
|
| Great deal, would do again if any VC wants to try again for the
| goodness of the movie industry.
| jedberg wrote:
| AMC has a similar program. It's not as good, but if you like
| movies and have the time, it's still a good deal.
| Gunax wrote:
| I believe the first blackout was during the release of 'It'.
|
| Of course they never called it a blackout... they just always
| seemed to experience technical issues... and always on Friday
| or Saturday... on always on a Friday or Saturday when a popular
| movie was being released. What a coincidence!
| oplav wrote:
| I had a similar experience. Got to see lots of movies in a
| small, comfortable (and expensive) NYC theater while always
| pre-picking my seats.
| JMTQp8lwXL wrote:
| Unpopular opinion, but MoviePass could have survived a lot longer
| if they had more funding. I think there could have been a real
| opportunity with establishing themselves the main funnel to
| getting consumers to physical theaters. They couldn't hold on
| long enough to see what could be possible with such a moat.
| s_dev wrote:
| They could never survive -- their customer demand came from
| selling $10 movie tickets for $9 -- funded entirely by investor
| burn.
|
| A sustainable business is one where you sell cinema tickets for
| $11 having bought them for $10 with the customer choosing you
| because you've added more than $1 in value for them.
|
| It's a car racing down a hill. The acceleration looks
| exponential but it's just going to crash.
| Sohcahtoa82 wrote:
| I always assumed that MoviePass's endgame was to funnel so
| many of the ticket sales through them that they could strong-
| arm the theaters into lowering their ticket prices. They
| thought if they captured the movie ticket sales market, they
| could tell the theater "Start allowing us to pay only
| $2/ticket or we'll remove you from our app and you won't make
| ANY sales!"
|
| I could be totally talking out my ass, but that's what I
| always figured. I don't see how else they could be
| profitable.
| asciident wrote:
| It was more like them selling $300 of movie tickets (I'd
| watch one a day) for $10. Everyone only used them for the
| arbitrage.
| jermaustin1 wrote:
| MoviePass could have survived longer if they had more money,
| and a different business model. The problem is they were
| letting you go to movies at AMC and Cinemark for less than they
| bought the tickets, and both AMC and Cinemark said they
| wouldn't negotiate lower prices for them.
|
| They could have had a small but cult business contracting with
| smaller theater chains, but they didn't.
|
| They could have also bought tickets in bulk, and sold them
| through the app, but they didn't.
|
| They could have reserved tickets at premiers and sold them at a
| markup, but they didn't.
|
| They could have done a LOT of things to make money, but they
| didn't.
|
| I say this as a onetime holder of more than 1% of publicly
| available shares. And I think at the time, one of the largest
| non-institutional shareholders.
|
| Lost a lot of money on wanting a dumb "title".
| indymike wrote:
| >The problem is they were letting you go to movies at AMC and
| Cinemark for less than they bought the tickets, and both AMC
| and Cinemark said they wouldn't negotiate lower prices for
| them.
|
| Considering the Cinemark near me is a $1.50 per ticket second
| run place...
| JMTQp8lwXL wrote:
| AMC and Cinemark would have negotiated if the moat was
| properly fortified is my thesis. They didn't have enough
| runway to determine the feasibility.
|
| Anyone could've looked at MoviePass' public filings and
| determined they would be no problem to AMC.
|
| What if Uber and Lyft didn't subsidize ridesharing for years?
| Yellow cab service would still be the market leader today.
| jermaustin1 wrote:
| > What if Uber and Lyft didn't subsidize ridesharing for
| years?
|
| That is different. Uber and Lyft were paying drivers to
| drive.
|
| MoviePass was giving people basically free tickets, but
| paying FULL FARE at AMC and Cinemark.
|
| AMC and Cinemark have no reason to negotiate because what
| would happen if MoviePass stopped giving away tickets to
| AMC and Cinemark? Users would leave MoviePass and continue
| going to AMC and Cinemark at full price.
| listenallyall wrote:
| Not at nearly the same volume.
| slg wrote:
| Uber and Lyft created new supply by attracting new drivers
| to the market. MoviePass was not creating any new supply or
| any value at all. It simply inserted itself as a middleman
| between theaters and consumers and pulled in subscribers by
| literally paying for their movie tickets with VC funding.
| thirtyseven wrote:
| Thanks for the free tickets! Just curious, what was your
| motivation for investing so heavily if you knew the business
| model was dumb?
| TameAntelope wrote:
| Not the guy you asked, but he just listed a half-dozen or
| so things he probably expected them to expand into that
| were promising/could have worked out, so I'm guessing he
| invested hoping they'd do those things, and was pissed when
| they didn't.
| jermaustin1 wrote:
| For the bragging rights.
|
| It was already about to be delisted and I think it was sub
| $1/share. So I looked up how much I'd need to own to match
| the largest individual investor, and decided.
|
| I could have invested the paltry amount (I actually cannot
| remember how much, but it was < $10k in my IRA) in
| something worth while, or... burn it all to own more more
| than any other individual investor at the time that I did
| it.
|
| I only held for a couple of days, before selling it at a
| ~70% loss - or vanguard liquidating when it delisted - I
| cannot remember now.
|
| But it was a fun ride and brag I got to have. People at the
| office cheered for me. People in my house berated me.
| nathancahill wrote:
| Haha is "the office" WallSteetBets?
| jermaustin1 wrote:
| I had never even used reddit before just a few months
| ago, so no, it was an actual office lol.
| Telemakhos wrote:
| MoviePass was started by a group of conmen who ran scams in
| India.
|
| https://www.businessinsider.com/moviepass-owner-emerged-from...
|
| The company was a classic pump-and-dump; it was never supposed
| to last this long. Somewhere along the line some other, US-
| based conmen ("serial entrepreneurs") got involved, probably
| holding the bag for the founders who got their stock profits
| and bailed.
| rrrrrrrrrrrryan wrote:
| I think their main mistake was antagonizing the big theater
| chains. They should've had their hand outstretched to the
| chains, consistently, from the very beginning.
|
| The (probably smaller) chains that play ball and negotiate
| selling cheaper tickets to moviepass get rewarded with more
| foot traffic, the chains that don't play ball get punished in
| small ways.
|
| By _gently_ and gradually steering traffic away from AMC, they
| would 've put themselves in a much better position for
| negotiation.
| listenallyall wrote:
| How is buying millions of tickets "antagonizing"? And what
| intelligent company turns down a 5-million ticket order - at
| full price! - from a single customer in favor of selling 3
| million tickets one-by-one?
| rrrrrrrrrrrryan wrote:
| I was referring to the statements they made intentionally
| taunting AMC. That's not how you get people to come to the
| negotiating table.
|
| AMC absolutely did the right thing: they kept their mouth
| shut, collected the money, waited for MoviePass to fizzle
| out, then launched their own (presumably profitable)
| subscription service.
| listenallyall wrote:
| ...and watched its stock decline from mid-20s when MP
| launched to under $5 if I remember correctly. Later it
| became a WSB meme stock, but that is a different story.
| jlarocco wrote:
| Sure, but any business can survive indefinitely if they're
| given unlimited funding with no expectation of returns.
|
| In your opinion, what's the point of being the main funnel to
| theaters if you're losing money hand over fist to do so? What
| was the plan for profitability? Was the goal to somehow strong
| arm movie theaters into discounted pricing? Why would theaters
| agree to that when there's no benefit for them to do so,
| they're the ones with the actual product and it's irrelevant to
| them if MoviePass survives?
|
| The only way their business model can work is if the majority
| of customers sign up and never use it, which is a very weird
| thing for a business to depend on, IMO.
| cr1895 wrote:
| > The only way their business model can work is if the
| majority of customers sign up and never use it, which is a
| very weird thing for a business to depend on, IMO.
|
| This is essentially the concept of insurance, is it not?
| xmprt wrote:
| Insurance has the additional model of finding ways to avoid
| paying out claims even when people do try to use it. I
| think MoviePass would have a hard time stopping users from
| using their tickets once they already purchased them
| through the app (although they did try by blacking out
| certain movies).
| ascagnel_ wrote:
| Insurance works best when it's something that appeals
| widely (eg: all drivers must carry insurance) but is used
| rarely (very few drivers will have an accident at any given
| time). MoviePass was offering a service with narrow appeal
| (avid moviegoers) that used the service frequently.
| warkdarrior wrote:
| Kind of, but the insurance business depends on the costly
| events being rare and mostly independent of the customers'
| choices (e.g., getting sick is the event for health
| insurance, getting into a car accident for auto insurance).
|
| MoviePass is the opposite. It sells/sold a product that is
| frequent enough and dependent on customers' choices. The
| MoviePass product is pitched as way to go to the movies
| whenever and as often as you want, thus maximizing the
| frequency of costly events (i.e., paying for theater
| tickets).
| jlarocco wrote:
| It's not the same at all.
|
| Insurance protects people financially from unlikely and
| *undesirable* events they don't want to happen. Nobody in
| good faith wants to get in a car accident or have a medical
| emergency. Insurance "works" by assuming most people won't
| have to or want to use it.
|
| MoviePass is doing exactly the opposite, though. They're
| selling a desirable product for much cheaper than normal
| while paying full price themselves and hoping people won't
| actually take advantage.
| jedberg wrote:
| > The only way their business model can work is if the
| majority of customers sign up and never use it, which is a
| very weird thing for a business to depend on, IMO.
|
| This is basically how gyms are profitable.
| jlarocco wrote:
| Maybe, but a gym membership isn't trying to sell me
| somebody else's product for 1/3 the price, while paying the
| full price themself.
| [deleted]
| listenallyall wrote:
| Gym membership.
|
| > no benefit
|
| Movie theater attendance has been dropping steadily.
| Theaters, especially today's multi-plexes, are vast
| wastelands of empty seats the majority of the time. There
| absolutely is a benefit to them selling more tickets at off-
| peak times, or to not-so-hot films, or just as an incentive
| to sell popcorn. Keep in mind all this extra volume would
| cost theaters ZERO in additional marketing expense.
| jlarocco wrote:
| > Gym membership. > Movie theater attendance has been
| dropping steadily. Theaters, especially today's multi-
| plexes, are vast wastelands of empty seats the majority of
| the time. There absolutely is a benefit to them selling
| more tickets at off-peak times, or to not-so-hot films, or
| just as an incentive to sell popcorn. Keep in mind all this
| extra volume would cost theaters ZERO in additional
| marketing expense.
|
| But if theaters wanted to do that then they would lower
| prices themselves.
|
| And for all we know, most people signing up for MoviePass
| were the same people who were still going to the movies
| anyways.
| DrBenCarson wrote:
| I thought I was just terrible with using my password manager....
|
| This happened to me at least a couple times back in 2016 when I
| was seeing 2+ movies with MoviePass. I would get to the movie
| theater and all of a sudden be locked out. I would need to reset
| my password standing on the curb waiting to get a damn email over
| 500kbps LTE.
|
| Good to know it wasn't my fault and that the public in general is
| now aware of this behavior.
| granshaw wrote:
| Classic tactic, similar to insurance companies who advertise
| great service but throw every caveat in the book at you when you
| actually file a claim, such that you can't get to use, you know,
| what you actually paid for...
|
| There has to be a term for this?
| leephillips wrote:
| Yes, it's called a "contract".
| jermaustin1 wrote:
| There is... fraud.
| totesraunch wrote:
| "Under the proposed settlement, MoviePass, Inc ...will be barred
| from misrepresenting their business and data security practices."
|
| Isn't this how things are supposed to be from the onset? That'll
| teach 'em!
| jrockway wrote:
| Hey now, the government isn't messing around:
|
| > violation of such an order may result in a civil penalty of
| up to $43,792
|
| Oh. I think it would actually be more punitive to literally
| slap them on the wrist.
| effingwewt wrote:
| And this here is the sad reason why these schemes will
| _always_ happen.
|
| It's simply more profitable for them to pay the negligible
| fines/fees.
|
| I'd bet dollars to donuts this would change immediately if
| there were criminal liabilities involved.
|
| But since corporations are rich people who face no
| repercussions and who can limitlessly lobby to craft laws
| bespoke to them, I don't see that happening any time soon.
| bdefore wrote:
| I owe a debt of gratitude to MoviePass. Their shenanigans led me
| to learn about virtual credit cards (privacy.com in my case).
| I'll never be surprise billed by a subscription service again.
| Cu3PO42 wrote:
| Unfortunately, privacy.com is only available in the US. I had
| been looking for an alternative for quite some time, but
| recently I stumbled onto the fact that Wise (formerly
| TrasferWise) will give you a seemingly unlimited amount of
| virtual cards if you open an account with them.
|
| As far as I can tell this isn't documented on their website,
| but I can definitely get new cards on demand and disable them
| as necessary. In fact, their website still mostly references
| MasterCard, however I have received a physical Visa card and
| the virtual cards are all Visa as well.
|
| This isn't as sophisticated an offering as privacy.com because
| you can't set a fixed limit per card, but it's a lot better
| than nothing.
| ozym4nd145 wrote:
| I believe Wise has a limit of upto 3 virtual cards. Are you
| able create more? source: https://www.kasareviews.com/wise-
| debit-card-review-pros-cons
| Cu3PO42 wrote:
| I have three now and the UI to create more is still
| available. It's possible that clicking on it would fail (I
| don't want to needlessly waste card numbers), but I have
| definitely verified that replacing card details works:
| there is a button that lets you invalidate an existing card
| and create a new one.
|
| In that sense it may be limited in the amount of cards you
| can have at once, but unlimited in the number of card
| details you could go through.
| [deleted]
| arbitrage wrote:
| you will once a big enough fish captures/compromises
| privacy.com.
| ahmedalsudani wrote:
| That's amazing. Matt Levine covered it in his column today as
| well--haven't had time to read it yet, but it's probably good as
| usual
| https://www.bloomberg.com/opinion/articles/2021-06-08/moviep...
| justusthane wrote:
| I suspect you're downvoted for recommending something you
| didn't read, but yes, it is very good:
|
| > If you sell $20 worth of movie tickets for $10, people will
| sign up, you will have rapid user growth and you can probably
| get someone to think that that's valuable, even though in fact
| every user that you add costs you $10.
|
| > But -- unlike most of the "MoviePass economy" -- MoviePass
| was not actually a venture-funded startup, did not raise piles
| of money, and was somewhat constrained by economic reality. So
| at some point the company looked for ways to make this insane
| business model work, and it found one. It's pretty simple: What
| if MoviePass collected your $10 each month and then, when you
| asked it for movie tickets, it ignored you? Then it could keep
| collecting your $10 a month without spending money on tickets.
| Eventually you'd get annoyed by not getting what you paid for,
| and you'd try to cancel your membership and get your money
| back, but MoviePass could ignore that too and keep collecting
| the $10. Giving people unlimited movie tickets for $10 a month
| is a good way to get rapid customer growth; telling people
| you'll give them unlimited movie tickets for $10 a month, but
| not actually doing it, is a way to pivot to profitability.
| jcwayne wrote:
| Add in a startup fee and it would be a gym membership.
| nullbyte wrote:
| For a subscription based business, that's just extremely
| unethical
| lotsofpulp wrote:
| The government knows the executives at MoviePass committed theft,
| but we will not see any criminal charges filed.
| twinkletwinkle_ wrote:
| Crime is a social construct.
|
| edit: A poor person who steals is charged. A rich person who
| steals behind the facade of a company is not. We call the poor
| person a criminal. It's entirely divorced from an actual moral
| framework, but simply constructed. I was agreeing with the
| commenter I replied to.
| mdavidn wrote:
| So are criminal charges.
| GIFnotGIF wrote:
| So are movies.
| arthurcolle wrote:
| Movies are real physical artifacts. Calling them a social
| construct is beyond specious.
| usrusr wrote:
| And the entire concept of ownership.
|
| It's actually quite unbelievable how there can be societies
| that do have the concept of a death sentence, but don't
| have the concept of a property nullification sentence. "You
| may live, but you have to start at zero and any obligation
| someone might have to you is nullified". The inverse of
| bankruptcy, basically.
| ohhhhhh wrote:
| That's cause this idea is completely immoral
| Thiez wrote:
| Moreso than the death penalty, in your opinion?
| [deleted]
| tolbish wrote:
| I don't understand why you are getting downvoted. When people
| say they support "Law and order" they are not talking about
| all crime--they are not referring to fraud or market
| manipulation for example (white collar crime). They are
| referring to enforcing laws on just a certain subset of
| society.
| Chris2048 wrote:
| > They are referring to enforcing laws on just a certain
| subset of society.
|
| Or enforcing a certain subset of laws on all society.
|
| And it's not just the "bigbiz-friendly" reds, it's also the
| blues with their "lets not punish non-violent crime". The
| fact is laws in the US (and elsewhere) are written, but
| unevenly enforced, as such what remains is quibbling over
| priority. I want to see more punishments for white collar
| crime, but I also want to see less leniency for repeated
| blue-collar crime too.
| tolbish wrote:
| The difference being "the blues" have never pretended to
| be the party of law and order.
|
| Because, as you noted, the "bigbiz-friendly reds" do not
| actually support law and order either, the term "law and
| order" is in reality a dogwhistle.
|
| https://en.m.wikipedia.org/wiki/Dog_whistle_(politics)
| sidlls wrote:
| Less leniency? "Blue-collar crime" in the US carries some
| of the most draconian penalties of any developed nation.
| twinkletwinkle_ wrote:
| I think if I'd instead written "This is what people mean
| when they say 'Crime is a social construct'" it wouldn't
| have been downvoted from the outset. "X is a social
| construct" is heavily associated with a certain viewpoint
| that HN tends to reject. But I quite like the symbolism of
| being downvoted "superficially" until I edited to explain
| in more detail.
| jfengel wrote:
| I avoid progressive jargon when talking on HN. It's
| actually kind of a useful exercise to be able to address
| the concepts directly but concisely without the
| vocabulary.
|
| It does mean I lose access to a lot of the background
| support. Jargon, in every field, brings in a whole wealth
| of connected concepts and helps you communicate
| precisely. But some words get "skunked" (overloaded with
| confusing, contradictory, or pejorative meanings), and I
| avoid them when I think I won't be understood.
|
| I don't fool myself into thinking I'm actually persuading
| anybody. The best I can hope for is a vague notion that
| somebody might remember that they read something once.
| And that works best if I'm not automatically downvoted --
| which I know I will be if some people reject it out of
| hand.
| Chris2048 wrote:
| Simplistic. A poor person is not usually trusted, so their
| thefts are often more egregious.
| lotsofpulp wrote:
| I disagree with the characterization that MoviePass' theft
| is less egregious than a poor person's theft, such as of a
| physical item.
|
| MoviePass' theft contributes to a weakening of trust
| amongst everyone in society, which is a much more difficult
| problem to address than theft of physical goods.
|
| Not that society should be lenient on either.
| legitster wrote:
| I don't think this _necessarily_ precludes formal criminal
| charges. Even the dissenting opinion was like "this is clearly
| a crime, but outside of the FTC's authority".
| lotsofpulp wrote:
| It is a prediction based on how many times I see
| SEC/FTC/FCC/FAA/other government agency report on misdeeds,
| but it never results in any criminal charges against any
| person. The responsible parties are never even named,
| effectively making it so all these investigations and reports
| do not result in the slightest bit of deterrent.
|
| Another even better example was linked in another comment in
| this thread:
|
| https://www.sec.gov/news/statement/stein-waivers-granted-
| dis...
| legitster wrote:
| This is more of a failure on the justice department.
| Federal regulators are not prosecutors and it's probably
| for the best that they don't have the authority to lock
| people up. But it certainly feels like we don't have enough
| criminal law on the books for executive malfeasance.
|
| This case may be a bit different though - they apparently
| left a pretty big paper trail:
|
| > When Lowe and Farnsworth presented the disruption program
| to other executives of Respondent MoviePass, one executive
| warned that the password disruption program "would be
| targeting all of our heavy users" and that "there is a high
| risk this would catch the FTC's attention (and State AG's
| attention) and could reinvigorate their questioning of
| MoviePass, this time from a Consumer Protection
| standpoint." (Emphasis in original).
|
| > Another executive agreed, warning of "FTC Fears: All [the
| other MoviePass executive's] notes about FTC and PR [public
| relations] fire are my main concerns as I think the PR
| backlash will flame the FTC stuff." (Emphasis in original).
| [deleted]
| diogenesjunior wrote:
| >"MoviePass and its executives went to great lengths to deny
| consumers access to the service they paid for while also failing
| to secure their personal information,"
|
| As expected.
| forgotmysn wrote:
| im not sure id put MoviePass in the same category as FAANG
| mc32 wrote:
| It's different degrees of abuse. Moviepass committed fraud,
| and FAANG are not committing that kind of crime, they do
| engage in sketchy things. The whole ad business model is
| sketchy, getting people addicted to "binging" on content is
| questionable, Amz and its commingling issues, copying
| resellers, it's terrible review system and well, social media
| siphoning personal data unscrupulously.... that's not exactly
| stand up catagory.
| forgotmysn wrote:
| im certainly not defending big tech, but as you say, they
| have different problems than MoviePass did.
| mc32 wrote:
| True, Our problem is they don't think _they_ have a
| problem when they clearly do.
| 0xbadcafebee wrote:
| s/big tech/business/
| justapassenger wrote:
| MoviePass was as much as much of a tech company as WeWork.
| Having a website doesn't make you a tech company.
| reidjs wrote:
| I sort of like the peopleware description of technology
| "anything that didn't exist when you were a kid is
| technology"
|
| In that sense movie theater subscriptions counts as
| technology. Is moviepass still dumb? Yes.
| balefrost wrote:
| I guess that also means that Gritty is technology. I like
| to think that Gritty would approve of that.
| vmception wrote:
| The VCs involved are what determine whether any company is a
| tech company
|
| It is how they can convince others to use a favorably high
| revenue multiple for selling any portions of the business to
| other people
|
| There, saved you some time
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