Home Ad Exchange News TV Data Goes Opt-In: FTC Penalizes Vizio For ‘Unfair And Deceptive’ Data Collection

TV Data Goes Opt-In: FTC Penalizes Vizio For ‘Unfair And Deceptive’ Data Collection

SHARE:

ftc-vizioTelevision viewing data is sensitive. And because consumers don’t expect such data to be collected, smart-TV manufacturer Vizio was penalized for doing so without an opt-in.

Vizio paid the Federal Trade Commission (FTC) $2.2 million to settle charges over its data collection practices on Monday. The settlement requires that Vizio delete its old data and get an affirmative opt-in for future data collection.

“In our complaint, we have alleged that TV viewing information is sensitive data that requires an opt-in for collection and sharing, much like other categories of sensitive information including health and financial information, children’s information and precise geolocation,” FTC attorney Kevin Moriarty told AdExchanger.

Although FTC settlements only apply to the company being disciplined, in this case Vizio, the ruling is likely to be interpreted by other TV manufacturers dabbling in data collection that TV viewing data requires an opt-in.

“This settlement … makes clear that smart-TV makers should get people’s consent before collecting and sharing television viewing information,” Moriarty added in a blog post about the settlement.

Other TV manufacturers may already comply. When ProPublica broke the news about Vizio’s data collection in November 2015, it mentioned that Samsung and LG Electronics only collected data after receiving an opt-in.

What got Vizio in trouble was not only the type of data it collected, but that it did so in an “unfair and deceptive” way – practices the FTC watches over closely.

When users activated Vizio’s “Smart Interactivity” feature that collected their data, they were promised offers and suggestions, but not told how data would be collected and why. That created what the FTC characterized as a misleading opt-in.

Plus, the data collected from consumers was ruled too sensitive.

Vizio used automated content recognition to track what programs and ads a consumer watched across cable, broadband, set-top boxes, DVDs, streaming devices and on-air broadcasts. And Vizio appended that data to include sex, age, income, marital status, household size, education level, home ownership and household value, according to an FTC release.

The company then sold that data. Multiple class-action lawsuits name WPP Group, Interpublic Group, Tapad, Xaxis, TubeMogul and Visible World as companies receiving that data. Those lawsuits, which will proceed separately from the FTC settlement, hinge on an interpretation of the Video Privacy Protection Act, a law that prevented video rental companies from selling data about movie rental history.

The timing of the settlement means the investigation began under outgoing FTC Chairwoman Edith Ramirez. But the incoming chairwoman, Maureen K. Ohlhausen, voted in favor of the settlement. Her statement about the Vizio settlement, though, suggests that she may use a different set of criteria for future cases.

“There may be good policy reasons to consider such information [individualized television viewing activity] sensitive,” Ohlhausen said. “We must determine whether the practice causes substantial injury that is not reasonably avoidable by the consumer and is not outweighed by benefits to competition or consumers,” she continued, saying that she would launch an effort in the coming weeks to examine this issue further.

On the business side, this settlement ironically may pave the way for the advanced TV space to develop, according to a source who partners with Vizio around its data. The source didn’t want to be named because it could violate a nondisclosure agreement.

“I don’t expect this to massively affect Vizio’s ability to collect TV data long-term,” the source said. “With this behind us now, we expect a lot more growth in the business together.”

Update: Vizio sent a statement in response to the settlement to AdExchanger. Vizio said that it never matched viewing data with any personally identifiable information (PII). Vizio also said that it updated its disclosures prior to the settlement.

And the smart TV manufacturer confirmed that opt-in will be the norm for TV data collection. “Today, the FTC has made clear that all smart TV makers should get people’s consent before collecting and sharing television viewing information and Vizio now is leading the way,” Vizio General Counsel Jerry Huang said.

Must Read

AdExchanger's Big Story podcast with journalistic insights on advertising, marketing and ad tech

AppLovin’s Play To Reach Non-Gaming Advertisers

Gaming apps are filled with ads for more gaming apps. Why not other advertisers? We go inside AppLovin’s play to bring non-gaming advertisers into the fold.

Andrea Kwiatek, director of strategic partnerships at Goodway Group

Agentic AI Is A Shiny New Object, But Supply-Path Optimization Is A Reality Check

AI can help make media buying more efficient. But it’ll take some more time before AI agents are a seamless part of the modern media buying process, says Goodway Group’s Andrea Kwiatek, director of strategic partnerships.

Pinterest Names Jason Fairchild GM Of Programmatic And Affiliate

Pinterest expanded tvScientific CEO and Co-Founder Jason Fairchild’s title to general manager of programmatic and affiliate. The title upgrade comes less than a year after Pinterest acquired the performance-focused CTV ad startup.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Liftoff’s Message For Investors During Its First Earnings Call: We’re Not Just A Gaming Company

Liftoff used its market debut to school investors on mobile ad tech – and make the case that travel, finance and shopping apps could be its next growth engine.

Benoit Vatere, chief media & digital commerce officer, Liquid Death

Murder Your Thirst And Measure Everything

Liquid Death is all jokes and dark humor on the surface, but the canned water brand’s chief media and digital commerce officer, Benoit Vatere, takes measurement deadly seriously. He’s tackling one of the gnarliest problems in CPG: proving that media actually moves product off the shelves.

The Trade Desk’s Revenue Growth Stalls As Big Brands Tighten Their Belts

“Our revenue growth is below our expectations and below the standard we hold ourselves to,” The Trade Desk CEO Jeff Green told investors.