An anonymous reader writes "Netflix just announced that they have cancelled the sequel to the Netflix Prize, which was promised last year. Netflix made the choice after they were sued over privacy concerns. The prize involves releasing large amounts of data about users' movie preferences, which raised concerns from the Federal Trade Commission and a lawsuit from KamberLaw LLC. Netflix's Neil Hunt said, 'We have reached an understanding with the FTC and have settled the lawsuit with plaintiffs. The resolution to both matters involves certain parameters for how we use Netflix data in any future research programs.'"