The TV manufacturer Vizio agreed to pay $2.2 million to settle a lawsuit brought by the Federal Trade Commission and the State of New Jersey over its data collection practices.
The lawsuit alleged that the company’s internet-connected smart TVs were recording exactly what consumers were watching second by second. The sets were able to collect this data for shows from all sources, whether from cable or broadband service providers, set-top boxes, streaming devices, DVD players, or over-the-air broadcasts, amounting to 100 billion data points daily on millions of sets. Vizio then paired this information to customers’ IP addresses and sold it to data aggregators who in turn used the information to identify each individual consumer’s viewing habits, matched with detailed demographic information such as age, gender, income and education. The only information lacking were viewers’ actual names, but this was no impediment to companies eager to be able to feed highly targeted advertising to consumers.
In addition to the cash payment, Vizio agreed, without admitting liability, to stop unauthorized tracking, to prominently disclose its TV viewing collection practices, and to get consumers’ express consent before collecting and sharing viewing information. In addition, the company must delete most of the data it collected under the program.
What’s worth keeping in mind is that Vizio’s mistake wasn’t in collecting the data–that’s no different from what social media platforms and internet search companies do as their core business models. It was just not sufficiently transparent about its practices. With improved disclosure, it should be back to business as usual.