Written By: Jennifer V. Nguyen
In 2015, ProPublica, an independent newsroom that produces investigative journalism in the public’s interest, published an article regarding TV manufacturer Vizio’s data collecting practices. [1] The Federal Trade Commission (“FTC”) brought a suit against Vizio, which settled last week (February 6, 2017) for $3.7 million ($1.5 to the FTC and $2.2 million to New Jersey). [2]
In a time when data mining is so prevelant, what was it that Vizio did that caused it to be charged with violation of the FTC Act? The FTC’s complaint alleged that Vizio “failed to adequately disclose the nature of its ‘Smart Interactivity’ feature and failed to acquire consumer consent. [3] The “Smart Interactivity” feature was turned on by default and required consumers to opt-out. [4] Vizio used it to track more that 11 million smart TVs.[5] Not only did Vizio track its smart TVs with “Smart Interactivity”, but also its older models by remotely installing tracking software through updates. [6] The most shocking of all was that Vizio’s tracking software, by collecting the pixels on the TV screen, was able to collect and distinguish viewing data from streaming services such as Netflix, cable boxes, and DVD plays, basically anything that provided an image on the TV screen. [7]
Vizio then sold this data and although it prohibited the third parties from re-identifying its consumers, it provided IP addresses, which increasingly can be linked to individuals and can provide details such as sex, age, income, marital status, household size, education, “wealth indicators”, profession, and home ownership. [8] IP addresses can also be used to identify every device in your home including your phone, TV, and basically any connected hardware. [9] This allowed the third parties to track and target Vizio consumers across all their devices. [10]
The significance of this case is that Chairman Maureen Ohlhausen, in her concurring statement, called for a need “for the FTC to examine more rigorously what constitutes “substantial injury” in the context of information about consumers” and whether individualized television viewing activity “falls within the definition of sensitive information.” [11] Hopefully this will help clarify which practices are unfair and keep consumers on notice and protected as data mining becomes more ubiquitous and technology advances.
[1], [4], [8] – [9] See Angwin, Julia, ProPublica, Own a Vizio Smart TV? It’s Watching you, https://www.propublica.org/article/own-a-vizio-smart-tv-its-watching-you (Nov. 9, 2015, 11:57 a.m)
[2] – [3], [6] – [7], [10] Fair, Lesley, Federal Trade Commission, What Vizio was doing behind the TV screen, https://www.ftc.gov/news-events/blogs/business-blog/2017/02/what-vizio-was-doing-behind-tv-screen (Feb. 6, 2017; 11:05 a.m.)
[5] Olivarez-Giles, Nathan, Wall Street Journal, Vizio Settles FTC Lawsuit for Snooping on TV Viewers, https://www.wsj.com/articles/vizio-settles-ftc-lawsuit-for-snooping-on-tv-viewers-1486431867 (Feb. 6, 2017; 8:44 p.m. ET)
[11] Ohlhausen, Maureen K., Concurring Statement of Acting Chairman Maureen K. Ohlhausen In the Matter of Vizio, Inc. https://www.ftc.gov/system/files/documents/public_statements/1070773/vizio_concurring_statement_of_chairman_ohlhausen_2-6-17.pdf (Feb. 6, 2017).
Jennifer V. Nguyen. As a 2L at USF Law School, Jennifer is interested in Privacy, IP and Entertainment law. She has interned at Swarovski and Creative Industry Law. She recently hosted a panel on how in-house counsel can drive diversity and hopes to one day work in-house. On her free time she enjoys arranging flowers and curating her Spotify playlists.
