Vizio has agreed to pay a $2.2 million fine after the Federal Trade Commission (FTC) and New Jersey Attorney General busted the company for using its internet-connected Smart TVs to automatically track the viewing habits of 11 million customers on a continual basis. The information gleaned from customers was then beamed back to the company’s servers without consent.
In addition, Vizio was found to be collecting IP addresses, and then sharing that information with data aggregators in order to match the address with a particular household. “Vizio’s contracts with third parties prohibited the re-identification of consumers and households by name, but allowed a host of other personal details – for example, sex, age, income, marital status, household size, education, and home ownership,” wrote FTC Senior Attorney Lesley Fair in a blog posting. “Vizio permitted these companies to track and target its consumers across devices.”
As for other details that were gathered from customers’ TVs, Fair writes:
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.
To make matters worse, Vizio in effect “hid” this data collection behavior in a setting that it called Smart Interactivity. However, as the FTC alleges, this rather vague description didn’t go far enough to describe the kind of data that was being collected from customers on a daily basis.
As a result of its action, the FTC is now requiring Vizio to “prominently disclose and obtain affirmative express consent for its data collection and sharing practices” going forward. The company is also required to delete all data collected prior to March 1st, 2016. For its transgressions, Vizio has been ordered to pay a $1.5 million fine to the FTC, and roughly $700,000 to the New Jersey Division of Consumer Affairs.
For its part, Vizio has issued the following statement:
Vizio is pleased to reach this 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.
The ACR program 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 behaviors.
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.