While consumers have been watching TV, their TVs may have been watching what they were watching as well. According to a complaint filed by the Federal Trade Commission (FTC), the New Jersey Attorney General and the New Jersey Division of Consumer Affairs, consumers have been unaware that while watching their internet-connected Vizio televisions, the company was recording data on their viewing habits and transmitting it back to data servers to be sold to advertisers and others.
Vizio agreed to pay $2.2 million to settle charges that it was collecting viewer data on 11 million consumer TVs without consumers’ consent or knowledge, according to a FTC press release.
The complaint contends Vizio made TVs that automatically tracked what consumers were watching through a Smart Interactivity setting by recording the TV screen on a second-by-second basis, using software to capture information about the selection of pixels on the screen and then matching it to a database. Vizio would then earn money from providing the information to third parties through licensing agreements for advertising purposes. The software also allegedly periodically collected data and other information about the television, including IP address, wired and wireless MAC addresses, etc.
“The complaint alleges that Vizio engaged in unfair trade practices that violated the FTC Act and were unconscionable under New Jersey law,” according to an FTC Business Blog post. “The complaint also alleges that Vizio failed to adequately disclose the nature of its ‘Smart Interactivity’ feature and misled consumers with its generic name and description.”
The settlement requires Vizio to prominently disclose and obtain affirmative express consent for its data and sharing practices, as well as deleting any information recorded before March 1, 2016. The recording has taken place since at least 2014, according to court documents.
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.