Vizio fined by the FTC for collecting and selling user data without consumer consent

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On February 6th, 2017, The Federal Trade Commission (FTC) filed a lawsuit against American electronics company Vizio alleging privacy violations. The FTC counted unfair tracking, deceptive omission regarding smart interactivity, and deceptive representation regarding smart interactivity. The Commission alleged Vizio had software installed on their smart televisions which collected user data, which they then sold to advertisers.

Background

Vizio was founded in 2002 as V Inc. and by 2007 they were already known for their affordable TVs. In 2011, they released their first smart TV line. This new line had built in software that would allow users to do things like connect the TV to internet, use Bluetooth, and install apps. A few years after that, in 2016, Vizio launched their own operating system for these TVs called SmartCast (now called Vizio OS) that utilized Apple AirPlay and Chromecast, replacing the old Yahoo-based Vizio Internet Apps platform.

Vizio collecting data for marketing purposes without user consent

A complaint filed by the FTC and New Jersey Attorney General says that, starting in February 2014, Vizio had been capturing everything that was displayed on the TV with ACR (Automatic Content Recognition) software, and allegedly collecting sex, age, income, marital status, household size, education level, home ownership, and household value to sell it to 3rd parties for targeted advertising, and other various purposes. Vizio matched what was displayed on the screen to a database of content. The FTC explained in a press release how this was being implemented :

On a second-by-second basis, Vizio collected a selection of pixels on the screen that it matched to a database of TV, movie, and commercial content. What’s more, Vizio identified viewing data from cable or broadband service providers, set-top boxes, streaming devices, DVD players, and over-the-air broadcasts. Add it all up and Vizio captured as many as 100 billion data points each day from millions of TVs.

Vizio also advertised a feature called “Smart Interactivity” which “enables program offers and suggestions” according to Vizio. However Vizio did not disclose that this feature, enables collection of user data. The feature also did not provide the advertised functionality. The FTC said in a court order that Vizio must:

A. Prominently disclose to the consumer, separate and apart from any “privacy

policy,” “terms of use” page, or other similar document: (1) the types of Viewing Data that will

be collected and used, (2) the types of Viewing Data that will be shared with third parties; (3) the

identity or specific categories of such third parties; and (4) all purposes for Defendants’ sharing

of such information;

B. Obtain the consumer’s affirmative express consent (1) at the time the disclosure in

Part II.A is made and (2) upon any material changes to the terms disclosed in Part II.A

Lawsuit

The FTC filed a case against Vizio on February 6, 2017 called "VIZIO, INC. and VIZIO Inscape Services, LLC".

On February 6th, 2017, Vizio agreed to pay $2,200,000 to the FTC.

The complaint filed by the FTC acknowledges that Vizio sent onscreen notifications about changes to the Vizio privacy policy and Smart Interactivity being enabled for TVs that were updated in Febuary 2014, but this notification said nothing about the data being collected or Automatic Content Recognition.

The VIZIO Privacy Policy has changed. Smart Interactivity has

been enabled on your TV, but you may disable it in the settings

menu. See www.vizio.com/privacy for more details. This

message will time out in 1 minute.

In a court order from the case, the FTC said Vizio must, within 120 days of the order, delete all data that was collected before March 1st, 2016:

IT IS FURTHER ORDERED that within 120 days after entry of this Order, Defendants

and Defendants’ officers, agents, employees, and attorneys, and all other persons in active

concert or participation with any of them, who receive actual notice of this Order, must destroy

Viewing Data that has been collected prior to March 1, 2016. Provided, however, that such

Viewing Data need not be destroyed, and may be disclosed, (A) to the extent requested by a

government agency or required by law, regulation, or court order, including without limitation as

required by rules applicable to the safeguarding of evidence in pending litigation, or (B) to the

extent a user of a television associated with the Viewing Data has affirmatively consented to the

collection, use, or disclosure thereof, consistent with Part II of this order.

See also

LG Television sale of personal data

Samsung Frame TV asks for subscription to view photos

Samsung TVs