• by Wendy Davis , Staff Writer @wendyndavis, October 3, 2012

Handing a victory to Pandora, a federal judge dismissed a lawsuit accusing the company of violating a Michigan privacy law by sharing information about Facebook users' music choices.

In the ruling, issued on Friday, U.S. District Court Judge Saundra Brown Armstrong in Oakland, Calif. said that Michigan's law -- which is more than 20 years old -- only applies if companies lend, rent or sell music. Armstrong specifically ruled that the law doesn't apply to companies that stream music online.

The lawsuit stemmed from Pandora's participation in Facebook's "instant personalization" program. That feature, launched in 2010, automatically shares logged-in Facebook users' names and photos with outside partners.

While people could always opt out of instant personalization, when Facebook launched the feature it operated by default. That aspect of the feature drew criticism by many privacy advocates, and also sparked several lawsuits against Facebook.

One user, Michigan resident Peter Deacon, was irked enough to file suit. He argued that Pandora's integration with Facebook violated Michigan's Video Rental Privacy Act. That law prohibits companies that rent, lend or sell music (as well as books and videos) from disclosing customers' identities without their consent.

Michigan lawmakers enacted the law more than 20 years ago, at around the same time that Congress passed the federal Video Privacy Protection Act -- which prohibits video providers from disclosing information about consumers' movie-viewing history without their written permission.

While Pandora prevailed, a different judge recently ruled against Hulu in a privacy lawsuit accusing it of violating the federal law by sharing Web users' information with ad networks and analytics companies.

Hulu argued that the case should be dismissed because the federal law mentioned "videocassettes" and "similar audiovisual materials," but didn't specifically discuss streaming video. But U.S. Magistrate Judge Laurel Beeler in the Northern District of California ruled that the 24-year-old federal law was aimed at protecting the privacy of people who watch video -- regardless of technical format.