Netflix on Thursday announced it is integrating its video streaming service with Facebook — allowing users to watch videos on either site and see what people on their friends lists are viewing.

It will be available in 44 countries except in Netflix’s biggest market -- the United States, because of the 1998 Video Privacy Protection Act that prohibits the disclosure of video sales or rental records, the company explained.

The legal barrier is the latest hurdle for Netflix, which has seen an exodus of customers since it announced new price hikes and lost a key contract with Starz for shows and movies.

CEO Reed Hastings has complained to investors that the law needs updating and noted during the Facebook f8 conference that legislation is being considered that would make it clear that rental companies such as Netflix can share Internet customer information.

“Under the VPPA, it is ambiguous when and how a user can give permission for his or her video viewing data to be shared,” he explained in a letter to shareholders last July.

The law came about, according to privacy advocacy group EPIC, after a D.C. area video store gave to a Washington City Paper reporter the rental records of U.S. District Judge Robert Bork, whose 1987 nomination to the Supreme Court was rejected by the Senate.

Netflix government affairs director, Michael Drobac, said times have changed and that the law needs updating. He urged users Thursday to write in support of an amendment that would allow Netflix to get user information and share it through the Internet.

“The good news, however, is that some forward-thinking members of Congress have introduced legislation, H.R. 2471, that would allow you to make this choice,” Drobac wrote on the company blog.

The company has been lobbying members of Congress this year to pass the bill. It is trying to hire more staff in Washington to fight this and other policy battles. It supports net neutrality rules at the FCC, which are about to go into effect and invite legal challenges by Internet service providers.

Netflix’s mounting in battles in Washington point to the business challenges ahead for the video streaming giant. After mishandling a price increase and losing a licensing deal with Starz, starting next year, the company is faced with greater competition from other video streaming sites such as Hulu and cable television providers offering similar services. Hulu also announced an integrated service with Facebook on Thursday.

Netflix is the biggest driver of U.S. Internet traffic, according to one study. As Internet service providers begin capping or tiering their data plans, that could cause consumers to watch fewer streaming videos on Netflix, analysts say.

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