Vizio-FTC Lawsuit: Smart TV Manufacturer Will Have To Ask Permission To Collect User Data

Vizio’s smart televisions were just a little too smart for the United States Federal Trade Commission’s taste. As a result, Vizio agreed to a $2.2 million settlement over a lawsuit that accused the company’s TVs of collecting watching habits of their customers without permission.

The suit, filed by the FTC and the state of New Jersey, dates back to February 2014 when the American electronics manufacturer began using data collection software in its smart TVs. The software was present on more than 11 million TVs.

According to the FTC complaint, Vizio was accused of recording “highly-specific, second-by-second information about television viewing.” The company never received consent from consumers to gather that information, which it then allegedly would sell to third-party companies.

Data gathered by Vizio’s devices included IP addresses, nearby access points, and zip code. The company would pair that, with the help of a third-party source, to demographic information including sex, age, income, marital status, household size, education level, home ownership and household value.

Vizio agreed to settle the suit by paying $2.2 million in charges—including more than $1 million to both the FTC and the New Jersey Division of Consumer Affairs.

Perhaps more importantly for consumers, the company will now have to obtain consent before collecting and sharing user viewing habits. It will also have to delete all data gathered by methods involved in the lawsuit by no later than March 1, 2016.

Vizio admitted no fault as part of the settlement despite paying a considerable fee for the practices it was sued for and agreeing to change those very practices. In a statement provided to International Business Times, the company postured itself as “leading the way” when it comes to consumer privacy protections on smart TVs.

“VIZIO is pleased to reach this resolution, company general counsel Jerry Huang said in a statement. “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.”

Vizio noted it had already addressed some of the concerns raised by the FTC by updating its disclosures both online and with on screen notifications about user viewing data.

FTC attorney Kevin Moriarty said the settlement “makes clear that smart TV makers should get people’s consent before collecting and sharing television viewing information.”

Vizio isn’t the first TV manufacturer to come under fire for tracking its viewers. The Electronic Privacy Information Center filed a complaint with the FTC against Samsung for similar practices that allegedly also tracked conversations had by customers.