VIZIO fined $2.2m in Smart TV privacy case
February 7, 2017
By Colin Mann
Smart TV manufacturer VIZIO has agreed to pay $2.2 million (€2.06m) to settle charges by the US Federal Trade Commission and the Office of the New Jersey Attorney General that it installed software on its TVs to collect viewing data on 11 million consumer TVs without consumers’ knowledge or consent.
The stipulated federal court order requires VIZIO to prominently disclose and obtain affirmative express consent for its data collection and sharing practices, and prohibits misrepresentations about the privacy, security, or confidentiality of consumer information they collect. It also requires the company to delete data collected before March 1, 2016, and to implement a comprehensive data privacy programme and biennial assessments of that programme.
According to the agencies’ complaint, starting in February 2014, VIZIO and an affiliated company have manufactured VIZIO Smart TVs that capture second-by-second information about video displayed on the Smart TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices.
In addition, VIZIO facilitated appending specific demographic information to the viewing data, such as sex, age, income, marital status, household size, education level, home ownership, and household value, the agencies allege. VIZIO sold this information to third parties, who used it for various purposes, including targeting advertising to consumers across devices, according to the complaint.
According to the complaint, VIZIO touted its ‘Smart Interactivity’ feature that “enables program offers and suggestions” but failed to inform consumers that the settings also enabled the collection of consumers’ viewing data. The complaint alleges that VIZIO’s data tracking—which occurred without viewers’ informed consent—was unfair and deceptive, in violation of the FTC Act and New Jersey consumer protection laws.
The $2.2 million payment by VIZIO includes a payment of $1.5 million to the FTC and $1 million to the New Jersey Division of Consumer Affairs, with $300,000 of that amount suspended.
The Commission vote approving the complaint and proposed order was 3-0, with Acting Chairman Maureen K. Ohlhausen issuing a concurring statement. The FTC filed the complaint and order in the US District Court for the District of New Jersey.
In a Statement, VIZIO said it was pleased to reach a resolution with the FTC and the New Jersey Division of Consumer Affairs.
“Going forward, this resolution sets a new standard for best industry privacy practices for the collection and analysis of data collected from today’s Internet-connected televisions and other home devices,” stated Jerry Huang, VIZIO General Counsel. “The ACR programme never paired viewing data with personally identifiable information such as name or contact information, and the Commission did not allege or contend otherwise. Instead, as the Complaint notes, the practices challenged by the government related only to the use of viewing data in the ‘aggregate’ to create summary reports measuring viewing audiences or behaviours.”
“Today, the FTC has made clear that all smart TV makers should get people’s consent before collecting and sharing television viewing information and VIZIO now is leading the way,” concluded Huang.
Even before today’s resolution was announced, VIZIO had addressed the concerns by updating online and onscreen disclosures. For example, the FTC Complaint acknowledged that VIZIO has sent onscreen notifications informing users about viewing data collection, reminding users of the option to turn this feature off or on, and educating users about the purpose and nature of its viewing data programme.
This resolution concludes all pending government investigations into VIZIO’s privacy practices.