(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.
Explore further: Group comes close to winning $1M Netflix prize