NEWARK, N.J. (CN) – Accused of monitoring what customers are viewing on 11 million smart televisions, Vizio reached a $2.2 million settlement Monday with the Federal Trade Commission.
Per the terms of the order filed this morning with a federal judge in New Jersey, Vizio must delete data collected before March 1, 2016. Going forward, the Irvine, California, company must prominently disclose and obtain affirmative express consent from customers whose data it plans to collect and share.
The FTC and New Jersey attorney general said Vizio collected viewing data via software installed on its TVs.
Jerry Huang, general counsel for Vizio, emphasized in a statement that the company “never paired viewing data with personally identifiable information such as name or contact information, and the commission did not allege or contend otherwise.”
“Instead, as the complaint notes, the practices challenged by the government related only to the use of viewing data in the ‘aggregate’ to create summary reports measuring viewing audiences or behaviors,” Huang added.
Vizio is now prohibited under the settlement from misrepresenting the privacy, security or confidentiality of consumer information it collects. It must also implement a comprehensive data-privacy program and biennial assessments of that program.
The FTC and New Jersey officials filed their complaint simultaneously with the settlement. They say Vizio and one of its affiliates have manufactured smart TVs since February 2014 “that capture second-by-second information about video displayed on the smart TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices.”
“In addition, Vizio facilitated appending specific demographic information to the viewing data, such as sex, age, income, marital status, household size, education level, home ownership, and household value,” according to a statement on the complaint.
The third parties that bought viewer information from Vizio used it for advertising to consumers across devices, according to the complaint.
Despite such activity, the FTC says Vizio failed to inform consumers that the settings enabled the data collection when it touted a feature called Smart Interactivity that enables program offers and suggestions.
The FTC says Vizio’s data tracking, which occurred without viewers’ informed consent, was unfair and deceptive, in violation of the FTC Act and New Jersey consumer-protection laws.
Vizio’s settlement includes a payment of $1.5 million to the FTC and $1 million to the New Jersey Division of Consumer Affairs, with $300,000 of that amount suspended.
The commission voted 3-0 to approve the complaint and proposed order.
Vizio noted that it had already updating online and onscreen disclosures to address the FTC’s concerns before today’s resolution was announced.
“For example, the FTC complaint acknowledged that Vizio has sent onscreen notifications informing users about viewing data collection, reminding users of the option to turn this feature off or on, and educating users about the purpose and nature of its viewing data program,” the company said in a statement.
“This resolution concludes all pending government investigations into Vizio’s privacy practices,” it added.