According to this story by Computerworld, the Video Privacy Protection Act of 1988 bans rental companies from releasing personal records of movie rentals unless a customer gives them permission to do so in writing. It may mean Facebook's privacy harangle with Beacon is solved by the opt-out they added. In fact, it likely means the opt-out they've already installed becomes legally necessary.
A blogger broke this story first. It seems Blockbuster has for sure violated the law via Beacon, but the question remains whether or not Facebook can also be held liable.
Given that Facebook is not a movie rental company - only the format via which the information was published - I'd guess the law doesn't apply to them. The law does not ban publishing movie rental information... it only bans rental places from releasing such information.
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