Vizio Fined $2.2 Million for Using Its TVs to Monitor Customers without Consent
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US television manufacturer Vizio has been slapped with a $2.2 million penalty by the Federal Trade Commission (FTC) for collecting data on the viewing habits of users without their knowledge or consent and selling it to advertisers.
According to the lawsuit filed against it by the FTC and the New Jersey Attorney General, Vizio began manufacturing TV sets in 2014 that monitored what viewers watched and relayed that information back to its servers using a process called automated content recognition (ACR). It also retrofitted older models with remote software updates in order to enlarge its dragnet. The tracking software was hidden behind a TV feature euphemistically named “Smart Interactivity”, which was ostensibly designed with the purpose of providing personalized recommendations.
In so doing, FTC lawyer Lesley Fair reports that Vizio was able to generate as many as 100 billion data points each day from millions of internet-connected TVs without ever informing consumers or requesting their permission. This information not only revealed what people were watching, but also what DVD players, streaming devices, set-top boxes, and cable/broadband providers they were using.
Instead of merely aggregating the data into a broad summary of American viewing habits, Vizio “got personal” according to the complaint and went further by transmitting customers’ IP addresses to data aggregators, who were in turn able to use that information to obstain their personal information– including sex, age, income, marital status, household size, education, and homeownership status. Vizio also negotiated contracts with third-party companies, allowing them to access these details and “track and target consumers across devices,” Fair writes.
Vizio’s general counsel Jerry Huang has denied this accusation, writing that the company “never paired viewing data with personally identifiable information such as names or contact information and the commission did not allege or contend otherwise,” according to The Philadelphia Inquirer.
In addition to the fine, Vizio has ceased unauthorized tracking, been ordered to destroy its illicit data hoard, and begun sending pop-ups to customers requesting consent to monitor their viewing activities.
Vizio is undoubtedly not the only TV manufacturer to engage in the lucrative practice of harvesting and selling customer data. The recent FTC lawsuit and penalty likely presage heightened regulatory scrutiny of other TV manufacturers involved in similar tracking activities. However, Vizio, unlike other major TV makers like Samsung and LG, never bothered to ask for permission, which is probably why it was targeted by first by the FTC, The Philadelphia Inquirer reports.
