Smart TV Maker Spied on Viewing Habits, Sold Data
Vizio is to pay $2.2 million in fines after tracking viewing habits on 11 million smart TVs without their owners' knowledge or permission. They then sold the details, including personal information, to advertisers.
As part of a settlement, Vizio has now agreed to inform customers about the practice and promises to always get their express consent before tracking any viewing. It will also have to delete much of the data it has already collected.
Vizio had relied on the idea that customers retained enough control because there was a setting named "Smart Interactivity" that could be switched off. The Federal Trade Commission (FTC) says this wasn't highlighted enough and that in any cases, Vizio had misled customers by merely saying the setting "enables program offers and suggestions." (Source: ftc.gov)
TV, DVD and Netflix Viewing Tracked
Amazingly what the setting actually did was enable software which analyzed a set of pixels on the screen every second. It then cross-referenced these pixels with an apparently huge database of movies and TV shows, which sounds similar to the way some firms automatically spot content uploaded to video sharing sites without permission.
The result was that Vizio was able to tell exactly what customers were watching, regardless of whether it was from television broadcasts, DVDs or streaming services. As well as including it on new sets, Vizio updated older smart TVs to carry out the tracking.
It then sold the resulting data along with the IP addresses to advertisers. The FTC says that although Vizio barred anyone else from using the data to identify individuals by name, it didn't restrict them from matching it to other personal information such as age, income or marital status.
Online Ads Based On TV Viewing
The advertisers bought the data in three different ways. Starting in May 2014, the data was simply a way to get overall figures on how many people watched particular shows and commercials.
From May 2015, Vizio began selling the data to companies which cross-referenced the information about a particular TV set with tracking activity on computers and other devices at the same IP address. The idea was to see whether people who saw a TV commercial then went on to visit the advertiser's website, or whether people who saw an online ad for a TV show went on to watch it.
From March 2016, the data began to be used to affect the ads people saw online, which began to be targeted based on the viewing habits of people in the household. (Source: nj.gov)
Vizio will now pay a penalty of $1.5 million to the FTC and a further $2.2 million to the state of New Jersey, which brought a complaint alongside the FTC.
What's Your Opinion?
Is the fine and deletion of the data a suitable punishment? Are you surprised that viewing habits can be tracked in such a way? Is the way Vizio used the data a major problem in itself, or is the real danger in how such data might fall into less responsible hands?
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Comments
Not surprised
I'm not surprised by this, which is why I'll likely never attach my TV to the Internet directly. Instead I'll use a PC to view Netflix and similar things if needed.
As far as the penalty is concerned - I wonder how much Vizio made from selling the data to advertisers and whether the penalties outweigh the advertising revenue?
Lastly, Vizio surely isn't the only company to do something like this. Google uses GPS to track where you've been in order to calculate things like traffic conditions and the time it takes to get home, and such. They will also ask you to rate businesses and the service based on places you've visited. That said, my wife's Hyundai Sante Fe recently had issues with the Sensor A gas gauge, and we've had to go back and forth to the dealership a number of times. Since then I've suddenly started to see a barrage of Hyundai advertisements for cars on my PC. Was that a coincidence? I think not!
Is a fine enough to deal with offenders
My thoughts are that the fine is effectively treated buy offenders as a form of taxation - as in "costs of doing business".
What aught to happen is that all those offended against should receive compensation, and details of where their data has gone - as in which of the many organisations currently annoying them with marketing, have seen fit to pay the offending company (Vizio) on the basis that they can, through the benefits achieved in the commercial use of that information get sufficient financial, or other benefits to justify the expenditure.
Require the company (Vizio?) to pay compensation to every individual they have taken advantage of.
The objective should be to make such practices a cost center, not a profit center.
Having to pay for the administration involved in paying out the entire income from the practice in individual payments to be made to each of the TV users, based upon the IP address and the sales dockets should add enough of an additional penalty to impress upon such offenders that in this case "crime does not pay".
There does, however need to be an enforcement to ensure that the management ensure the payments are made!
Maybe if the company does not make the appropriate payment within a year, the managers will have to pay the unpaid amounts into a holding account, and make those payments from their net assets and income.
So, that's have the organisation you manage take corporate responsibility - or you will be deemed by the courts to have declared it is not the corporate responsibility, but yours personally.
Yes - time the courts started not only making crime NOT pay, but ensuring those offended get recompense
I had a feeling Vizio was
I had a feeling Vizio was doing something like this. They were selling large TVs for almost nothing for a while.
I agree with jamies on this one. As much as I would like to see it, there's no way the government or court system will handle cases such that companies will stop this practice of 'it's better ask forgiveness than to ask for permission'. The companies are big and can stay in the game. Then there's the lobbying effort of other officials to sway things for them.
The consumer never gets adequate compensation in cases where a company does things like this. Even if each state brought its own case, it would only amount to $100 million or so....a drop in the bucket for a company like Vizio. It would be nice for each consumer to get a substantial amount. And not let the company get out of it by filing bankruptcy. Make every Chief, VP, and Board member personally responsible when companies do this sort of thing....after all, it was under their direct control.
I know what it takes to fight an erroneous entry in a credit report. And what it costs to fight and recover from misuse/theft of identity information. So, I place a high value on my personal info.