When TVs watch you: What we learned from the FTC’s VIZIO case

Television maker VIZIO is paying $2.2 million in penalties to settle charges after the FTC and the New Jersey Attorney General’s office brought a complaint against the company for violating its customers’ privacy. The complaint against VIZIO stated that the company collected detailed information on millions of its customers TV viewing habits without their express consent, and that VIZIO facilitated something called “data appending,” which is when even more detailed information is added to existing customer profiles. In this case, VIZIO facilitated adding the “sex, age, income, marital status, household size, education level, home ownership, and household value” of its customers to their television viewing habits, and then VIZIO sold this information, according to the FTC.

Here is what the FTC said about the case:

…Starting in February 2014, VIZIO, Inc. and an affiliated company have manufactured VIZIO smart TVs 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, the agencies allege. VIZIO sold this information to third parties, who used it for various purposes, including targeting advertising to consumers across devices, according to the complaint.

Going forward, VIZIO has been ordered to prominently disclose to consumers what types of television viewing data that will be collected and used, and the types of viewing data that will be shared with third parties, among other orders, including a requirement to obtain consumers’ “affirmative express consent” prior to collecting granular viewing information.

Several things stood out about this complaint and order.

First, the complaint revealed and documented the data append issue. Many a company purchases additional information about people from commercial data brokers or others to add to their existing customer profiles. This information can range from age to education even in some cases to potential illnesses and ailments. If people knew more about this practice, they might object strenuously. But this practice is largely hidden from view. This case is a reminder that at some point, and soon, we need to understand how information about our gender, age, race, marital status and other sensitive factors ….like our detailed television viewing habits ….might be used in a discriminatory fashion without our permission or knowledge, and how we might solve that problem in this modern data era.

Race and gender and age already cannot be used to determine credit eligibility, for example. But in other contexts this sensitive information is in fact used to make other kinds of decisions about people. We all need to do more to define how data append can discriminate against vulnerable populations, or any population. We need modern rules around data append practices and related issues such as discrimination, or unfair and/or inaccurate categorization of people.

The complaint described the process VIZIO used to acquire detailed information about its customers:

Defendants facilitate the provision of demographic information to third parties about VIZIO television viewers. Defendants do this by providing consumers’ IP addresses to a data aggregator. The data aggregator uses the IP address information to identify a particular consumer or household, and then sends the third parties described in Paragraph 16 the demographic information associated with that consumer or household. Defendants’ contracts with third-party users of the viewing data prohibit the re-identification of consumers and households by name, but allow the following information to be appended: sex, age, income, marital status, household size, education, home ownership, and household value.

Which brings us to another issue related to data append practices: if a customer is discriminated against or treated unfairly, then that treatment is unfair whether the customer’s name is attached to the unfair treatment or not. In this day and age, we need to understand that our names do not comprise the lynchpin of our identity anymore. Unfairness is unfairness, whether we are identified by our IP address, our biometric, our email, phone number, or any other manner of identifiers.

Second, the stipulated order required VIZIO to tell people separately from the privacy policy or terms of use about the types of information they are collecting, what kinds of that information will be shared with third parties, and stated VIZIO must disclose the purposes for the information sharing. The language in the order stated:

“…prominently disclose to the consumer, separate and apart from any “privacy policy,” “terms of use” page, or other similar document: (1) the types of Viewing Data that will be collected and used, (2) the types of Viewing Data that will be shared with third parties; (3) the identity or specific categories of such third parties; and (4) all purposes for Defendants’ sharing of such information;

That this disclosure cannot be buried in the fine print of a privacy policy or an 8,000 word Terms of Use policy is a boon for VIZIO customers, and a good precedent.

Third, the stipulated order specifically lays out that VIZIO must obtain its customers’ “affirmative express consent” at the time the prominent disclosure is made about data collection regarding customers’ television viewing activities. Also, VIZIO must allow its customers to revoke consent to the collection of viewing information at any time. This again is a good precedent. Too often orders do not contemplate the revocation of consent. Here is the exact language of the order. VIZIO must….

“B. Obtain the consumer’s affirmative express consent (1) at the time the disclosure in Part II.A is made and (2) upon any material changes to the terms disclosed in Part II.A; and

C. Provide instructions, at any time the consumer’s affirmative express consent is sought under Part II.B, for how the consumer may revoke consent to collection of Viewing Data.”

The FTC and Attorneys General’s offices cannot monitor every company practicing data tracking and data appending. But people who are using modern smart devices also should not have to be looking over their shoulders wondering if every act they take — whether it be watching TV, using a connected baby monitor, or talking to a digital home assistant — is going to have their every activity be monitored, data appended, and possibly sold. There is an important role in our society for enforcement, and there is also an important role in our society for companies that can be trusted. Trusted to tell the truth, trusted to do the right thing, and trusted to value customer information and treat it with genuine care.

Related Documents:

FTC press release about VIZIO case 

FTC VIZIO complaint, and exhibits

FTC and NJ AG Stipulated Order re: VIZIO 

FTC Consumer Information: VIZIO TV owners: how to check your TV privacy settings