Vizio has agreed to pay $2.2 million to settle charges it installed software on its “smart” televisions to collect data on the viewing habits of millions of consumers without their consent.
The Federal Trade Commission and the New Jersey attorney general said the software enables Vizio televisions manufactured since February 2014 to capture information about what a consumer is watching on a second-by-second basis.
According to a complaint filed by the agencies on Monday, Vizio earned revenue by licensing the data to third parties but its disclosures “were not sufficiently clear or prominent to alert consumers to their practices related to data collection and sale of licenses.”
The settlement requires Vizio to pay the agencies $2.2 million, obtain clear consent from viewers before collecting data on their viewing habits, and delete all data that it improperly gathered before March 1, 2016.
“The data generated when you watch television can reveal a lot about you and your household,” FTC attorney Kevin Moriarty said in a blog post. “So, before a company pulls up a chair next to you and starts taking careful notes on everything you watch (and then shares it with its partners), it should ask if that’s OK with you.”
Since 2010, Vizio has sold more than 11 million internet-connected televisions. The FTC said sets made since February 2014 continuously track what consumers are watching and transmit that data to Vizio through its proprietary ACR software, which is activated by default.
Vizio’s partners allegedly used the data for audience measurement, analyzing the effectiveness of advertisements, and targeting ads to particular consumers on their other digital devices.
An initial pop-up notification on the screen notified consumers that “Smart Interactivity” had been enabled on their television and could be disabled in the settings menu. But according to the FTC, the notification “provided no information about the collection of viewing data or ACR software.”
Vizio admitted no fault as part of the settlement. “While the settlement isn’t a huge sum, it indicates that companies using smart TV software to their advantage and without getting consumers’ consent will have to answer for their shady practices,” The Verge said.