Smart TVs Accused of Spying on Viewers

SAN FRANCISCO (CN) - When viewers turn on their Vizio smart TVs, the TVs are watching them, a Californian claims in a federal class action.

Vizio, a multibillion-dollar smart TV company, tracks the viewing patterns of its users and matches the data with personally identifying information that it sells to third parties, lead plaintiff Palma Reed claims in her Nov. 13 lawsuit.

Reed says Vizio partners with co-defendant Cognitive Media Networks to "secretly install invasive tracking software" in TVs to record which shows are watched and collect identifying information that can be linked to "particular households, and perhaps, particular people."

The lawsuit was filed 10 days after ProPublica published a report on Vizio and its practice of tracking users' viewing patterns without their express consent.

According to ProPublica , Vizio claims the Video Privacy Protection Act, which prohibits cable TV and video rental companies from selling information about customers' viewing habits, does not apply to them.

In its October filing for an initial public offering , Vizio flaunted its ability to collect data on a variety of content displayed on its TVs, including content from cable and satellite providers, streaming devices and gaming consoles. Vizio said it provides "highly specific viewing behavior data on a massive scale with great accuracy."

Vizio automatically opts customers in to the program without disclosing the tracking software, Reed says in the complaint. She claims Vizio "continuously scans consumers' home computer networks" to capture information that can be used to identify the people who were watching the TV.

"That is, although defendants know someone is watching a particular show or movie, they require additional information to assign the viewing information to a specific person," the 30-page complaint states.

Reed says that Vizio contracts with data brokers to obtain more personally identifying information about the people and households from whom it collects the information.

"With the enhanced data, Vizio now knows that it was Jane Doe at 123 Main Street that watched 'Scandal' on a Thursday at 8:00 p.m. pacific time with an IP address of 96.90.87.4 and a Wifi router MAC address of 04:bd:88:7a:1c:c1," the complaint states, adding that Vizio then sells that information to private companies.

Reed claims Vizio went to "great lengths" to conceal its tracking software from customers. She says Vizio hid references to the content tracking in "obscure settings menus," to prevent customers from discovering and understanding it.

If a customer does stumble upon Vizio's privacy policy, deep within sub-menus of its Smart TV options, the policy is displayed on a tiny fraction of the screen, "requiring consumers to stand inches away from their TVs to view complex and dense legal jargon," according to the lawsuit.

Although Vizio provides an opt-out feature allowing users to disable the tracking software, Vizio calls the feature "Smart Interactivity" and fails to explain how it allows the company to tracks users' viewing patterns, Reed says.

Reed says she bought two Vizio Smart TVs in Los Angeles in December 2012, for $324 and $606.

"At no time did she consent to the operation of defendants' tracking software," the complaint states. "And, at no time did defendants disclose to her that the Smart TVs had defendants' tracking software installed and operating."

Had she known about the tracking software, Reed says, she would not have bought the TVs.

She seeks class certification, an injunction, and statutory and punitive damages for false advertising, fraud, negligent omission, unjust enrichment and violations of the Video Privacy Protection Act and California business laws.

She is represented by Samuel Lasser with Edelson PC in San Francisco.

Vizio, an Irvine-based company that was founded in 2002, was the 142nd largest private company in the United States, with $3.1 billion in revenue in 2014, according to Forbes.

Vizio did not immediately respond to an email seeking comment Tuesday evening.

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