Vizio Nears $17 Million Settlement on Data-Tracking Smart Televisions

Ryan J. Farrick — October 5, 2018

Image via Flickr/user:kennejima. (CCA-BY-2.0).

Vizio seems to be nearing a settlement over its data-tracking smart televisions.

The Verge reports that the company’s overall payout could exceed $17 million. Just last year, Vizio was forced to hand over $2.2 million in fines to the Federal Trade Commission in another lawsuit.

Starting off as a class action, the case concerns allegations that Vizio kept tabs on nearly 16 million smart television sets across the United States. Options to opt-out of data-tracking weren’t transparent, sparking concerns that the company may be breaking the law.

And similar to other privacy-related suits, plaintiffs accuse Vizio of selling customers’ viewing histories—along with other personal, identifying information—to advertising and marketing firms, all without consent.

The tracking feature was called ‘Smart Interactivity’ by Vizio, turned on by default with the activation of new television sets.

In a statement reprinted by ProPublica, Vizio said customrs’ “non-personal identifiable information may be shared with select partners … to permit these companies to make, for example, better-informed decisions regarding content production, programming and advertising.”

But what Vizio did isn’t the same as what its competitors have done. ProPublica notes that Samsung and LG Electronics only initiated tracking programs if customers decided to enable the feature.

Vizio’s marketing surveillance kept tabs on traditional television usage as well as Netflix binges and YouTube searches. Viewing patterns were associated with individual IP addresses, which usually correspond with addresses.

A smart TV. Image via PxHere. Public domain.

“The data generated when you watch television can reveal a lot about you and your household,” explained FTC attorney Kevin Moriarty in a 2017 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 okay with you.”

Under the terms of the proposed settlement, writes BusinessWire.com, ‘Vizio will establish a $17 million settlement fund that will deliver money directly to consumers who bought Vizio Smart TVs that were subsequently connected to the Internet between February 1, 2014 and February 6, 2017.’

Following promises made to the FTC, Vizio has also stopped tracking customers’ viewing history unless an individual ‘consents to this tracking after receiving a prominent notification.’

Vizio plans to delete stored viewing data.

“After years of intensive litigation, we are pleased to present the Court with a nationwide class action settlement that is restorative,” said attorney Andre Mura. “$17 million is more than the revenue Vizio obtained from licensing viewing data during this three-year period, and the changes that Vizio is making and recently made to its business put customers in the driver’s seat when it comes to their viewing data. This is not only important relief for the class, it sets an important precedent for the entire consumer electronics industry at a time when companies are leveraging new technologies to track customers without their knowledge or consent.”

Vizio’s own reports indicate that its tracking service encompassed at least 16 million Vizio customers who sued their television sets within a three-year period.