Vizio Reaches Settlement in Class Action Case for Smart TV Spying

By Rob Stott

The following article was originally published by Dealerscope. To read more of their content, subscribe to their newsletter, Today in CE.

[Editor's note: Marketers, this directly speaks to the paranoia consumers have about voice interfaces, targeted TV and artificial intelligence regarding privacy of their data.]

Nearly three years after a ProPublica report exposed Vizio for collecting user viewing behavior without explicit consent to do so, the company announced it has reached a settlement in a related class action lawsuit. Lawyers representing Vizio Smart TV owners have asked a federal judge in Orange County, Calif., to approve a proposed settlement of $17 million.

Though the total sounds like a major payout for those smart TV owners, the number, according to an Ars Technica report, gets diluted down to roughly $20 per person for the class of roughly 16 million people — who must opt-in in order to get any money. Each of the affected individuals will receive somewhere between $13 and $31 each, while their lawyers will collectively earn a payout worth upward of $5.6 million in fees.

As part of the settlement, Vizio also said that it would delete all of the data that it had collected, and the company will provide notice of the lawsuit through direct notifications on Vizio Smart TVs and direct paper mailings.

Starting in early 2014 up through the release of the ProPublica report, Vizio reportedly used software on new and existing smart TVs to track second-by-second data about video displayed on the TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air content and streaming content. Other data collected included customer location, demographics and viewing habits. That information, which was reportedly collected without express consent of the consumer, was sold to advertisers.

Back in January of 2017, Vizio reached a $2.2 million settlement in a separate case related to this same matter with the Federal Trade Commission and the Office of the New Jersey Attorney General. The FTC said at the time that VIZIO touted its “Smart Interactivity” feature that “enables program offers and suggestions,” but never informed consumers that the settings also allowed for the collection of their viewing data. The practice isn’t uncommon, but consumers typically — albeit, sometimes due to being deceived — have opted into these types of programs.

An Ars Technica source told the publication that the $17 million settlement amount is more than what Vizio made by licensing the data it collected.

A final hearing on the settlement will be held in early December.