While it may sound like something out of dystopian sci-fi, some smart TVs have be turning watchers into the watched by secretly spying on their viewing habits. According to the Federal Trade Commission (FTC), Vizio — a major manufacturer of smart TVs — has been collecting user data through more than 11 million television sets without their owners’ knowledge or consent.
The data collected ranged from “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” to specific demographic information about viewers such as “sex, age, income, marital status, household size, education level, homeownership, and household value.” This data was then sold to third-parties for use in targeted advertising.
These and other allegations are detailed in a complaint filed by the FTC and New Jersey state officials in a New Jersey federal court on February 6, 2017. The lawsuit describes the data Vizio collected as “highly specific viewing behavior data on a massive scale with great accuracy” [emphasis in the original]. The complaint includes a request for injunctive relief and disgorgement remedies under the FTC Act and state law to prevent the company from engaging in unfair and deceptive acts or practices concerning (1) the unanticipated tracking and monitoring of consumer data; (2) the undisclosed collection and sharing of consumer information through the “Smart Interactivity” feature enabled on affected television sets; and (3) misrepresentations concerning the purpose of the “Smart Interactivity” feature.
In connection with the filing, the FTC also announced that Vizio had agreed to settle the lawsuit by paying $2.2 million in civil penalties and agreeing to a permanent injunction that would prohibit the unauthorized collection and tracking of consumer data. Among other things, the stipulated settlement requires Vizio (and, by implication, all Smart TV manufacturers) to obtain express permission from their consumers before collecting any data from their Smart TV devices.
While Vizio denied any wrongdoing as part of the stipulated settlement, the stipulation requires Vizio ask for consumer permission before collecting user data through its Smart TVs and requires the company to disclose the existence of the data-gathering software that came preinstalled on many of its devices, even if such software was installed through a nondescript update. The settlement also requires Vizio and its affiliates to delete all viewing data collected before March 1, 2016, in addition to establishing a comprehensive privacy program with biennial audits over a 20-year period.
An attorney with the FTC’s Division of Privacy and Identity Protection perhaps said it best when describing the harm that the litigation and settlement were intended to prevent: “[B]efore a company pulls up a chair next to you and starts taking careful notes on everything you watch (and then shares it with its partners), it should ask if that’s O.K. with you.”