Vizio Fined for Spying on Users via Smart TVs, Selling User Data Without Consent

Vizio agreed on Monday to pay a fine of $2.2 million after it was caught secretly collecting user data and then selling personal user details to third-parties without the user's explicit consent.

The fine is the result of an investigation opened last year by the US Federal Trade Commission (FTC) and the Office of the New Jersey Attorney General.

According to an official complaint (PDF), the FTC accused Vizio of including special software on its line of smart TVs that collected user viewing habits.

Vizio smart TVs collected user viewing habits

This software worked by collecting pixels from a portion of the screen each second and comparing the collected data against a database of known movies, TV shows, commercials, and other type of video content.

This allowed Vizio to identify what each Vizio TV owner was watching and at what time of day. Furthermore, Vizio used the same software to collect information on the user's IP address.

Without telling users, the company then sold this data to third-party companies that used this information to build advertising profiles for each user.

The FTC says that Vizio data facilitated advertisers in assembling extremely accurate profiles on Vizio's customers that included details such as sex, age, income, marital status, household size, education level, home ownership, and household value. The FTC alleges that this data was then used to target customers with cross-device advertising.

Data collection software was hidden in smart TV feature

Investigators wouldn't have had a problem if Vizio would have informed users of its practices in advance. Instead, the FTC says that Vizio hid this data collection software inside a feature called "Smart Interactivity."

Vizio said this smart TV feature was intended to display suggestions for content that users could watch. In its complaint, the FTC disagreed and said the "Smart Interactivity" feature never showed suggestions, but only collected user data.

Additionally, investigators also said that Vizio purposely updated older smart TV models to include the "Smart Interactivity" feature in order to collect information from more users.

Vizio never asked for user consent

Starting with 2014, when the "Smart Interactivity" feature was introduced, and until 2016, at no time had Vizio prompted users to ask for consent for their data collection and data sharing practice.

The FTC says that Vizio collected data from over 11 million customers, which it later sold to third-parties and made millions of dollars.

To make the FTC investigation go away, Vizio has now agreed to pay  $1.5 million to the FTC and $1 million to the New Jersey Division of Consumer Affairs, with $300,000 of that amount suspended, for a total fine of $2.2 million.

Further, Vizio has also accepted to stop any illegal user data collection practice (at least in the US), and also implement a mechanism to ask for a user's express consent before collecting and selling TV viewing habits.