IoT

Vizio Agrees To Pay $2.2 Million To Settle Too-Smart TV Lawsuit

The TVs were tracking viewership habits and selling the information to advertisers

IoT
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Feb 06, 2017 at 5:23 PM ET

Yet another Internet of Things device has bitten its creator in the ass: Vizio’s semi-secret viewer tracking software will cost the company $2.2 million, thanks to the Federal Trade Commission and the state of New Jersey.

On Monday, the electronics company settled a lawsuit brought by New Jersey’s attorney general and director of consumer affairs along with the FTC. At issue was Vizio’s “Smart Interactivity” software, which was installed on up to 11 million Smart TVs either at the time of purchase or retroactively through software updates. The software tracked users’ viewing habits and then matched their IP addresses up with individuals or households to get details like age, gender, and income. This would then create a profile Vizio could then sell to advertisers, allowing them to more efficiently target ads to those users.

Vizio didn’t really tell viewers that it was tracking them in this way, and the feature was turned on by default. The vast majority of customers had no idea it was even there. In 2015, Consumer Reports identified tracking programs in smart TVs for Samsung and LG along with Vizio. Samsung and LG might want to make sure they have a few million dollars lying around just in case they get sued by the FTC, too.

As part of the settlement, Vizio has agreed to stop tracking viewers and to get their informed consent for any kind of information collecting purposes in the future. It must also destroy all the information it collected and pay $1.5 million to the FTC and $700,000 to the New Jersey Division of Consumer Affairs (an additional $300,000 has been suspended provided that Vizio complies with the terms of the settlement).

While this may end Vizio’s legal woes with the FTC and New Jersey, it is also facing class action lawsuits from customers who allege its Smart TVs spied on them without their knowledge.