The video streaming giant made no admission of wrongdoing, though it is rumoured that the complaint relates to its failure to delete the rental histories of former customers, The AP reports.
A law called The Video Protection Privacy Act (VPPA) was passed in the US in 1998, prohibiting firms from disclosing the video rental histories of its subscribers. The measure was passed after an American newspaper revealed the viewing habits of then-Supreme Court nominee Robert Bork.
Netflix, which launched in the UK and Ireland last month, allegedly kept a record of ex-customers' transactions for up to two years after they left the service. The VPPA states that "video stores destroy rental records no longer than one year after an account is terminated".
The financial filing also revealed that Netflix's fourth-quarter earnings declined from $40.7m (£25.8m) to $35.2m (£22.3m) after the settlement was paid out.
Netflix has previously campaigned against VPPA, arguing that the legislation prevents it launching a Facebook app in the US.
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