The United States Federal Trade Commission (FTC) fined VIZIO $2.2 million for collecting user data without their consent, the agency announced on Monday. The Office of the New Jersey Attorney General and the FTC jointly charged the Irvine, California-based TV manufacturer for not only tracking the viewing habits of its users without their knowledge but also for selling their data to third-party advertisers. Authorities believe that VIZIO used this method to spy on approximately 11 million American households. The $2.2 million fine was agreed as a part of a settlement between Vizio, the FTC, and the State of New Jersey.
The FTC claims that VIZIO and one of its affiliates started implementing real-time tracking software into their TV lineup in 2014. This software was designed to analyze pixels that were displayed on television screens and cross-reference them with VIZIO's proprietary media database. Using this method, VIZIO collected approximately 100 billion data points on a daily basis for each device that was a part of its data collecting network. This solution analyzed media content from all sources, including cable TV, DVD players, and set-top boxes. After collecting massive amounts of data, VIZIO apparently sold that information to advertisers. Among other things, advertisers bought information about ages, genders, education and income levels, as well as marital statuses of VIZIO's customers. There's currently no information on how many individual users were affected by this practice though that number is certainly north of 11 million. Apart from violating the FTC Act, VIZIO's data collecting efforts also broke several consumer protection laws of the State of New Jersey.
The LeEco-owned consumer electronics manufacturer now agreed to pay a $1.5 million fine to the FTC, in addition to agreeing to a $1 million fine from the New Jersey Division of Consumer Affairs which agreed to suspend $300,000 of the initial amount. The wording of the FTC's Monday announcement implies that VIZIO likely wouldn't have broken any laws if the company was upfront with its users and asked them to agree to have their data collected. Instead, the well-known TV manufacturer shipped devices which collected data by default and consumers were only able to disable that functionality after already purchasing their products from VIZIO.