Why Vizio Has To Pay Out Millions And Millions Of Dollars

vizio TV

Vizio is being ordered to pay out damages after selling consumer information the company obtained from its smart televisions. The New Jersey attorney general says that many Vizio television owners unknowingly had data collected on what movies, television, streaming and other things that they did with their televisions. Now, the company is being ordered to pay $1.5 million in damages to the FTC as well as a civil penalty to the state of New Jersey of $2.2 million.

The official FTC complaint lodged by the New Jersey attorney general states that they believe Vizio's actions violated the FTC Act and not allowed under New Jersey law. The complaint also points out that naming of the tracking software was vague and did not inform consumers as to what the true nature of the device was. The feature, which is called Smart Interactivity, was a euphemism for the tracking feature that was enabled in the televisions. The feature was supposed to "enable program offers and suggestions", but the New Jersey Attorney General felt that description did not. It's worth noting that the feature did not, in fact, enable program offers or suggestions.

The FTC Report says that since 2010, Vizio has had the ability to collect data on several items in the home of any person's Smart internet-enabled television. As we mentioned, this covers televisions and streaming services, but it also includes things such as DVD players, DVR Boxes and other devices that were connected to the televisions. In total it was said that the company was receiving around 100 billion points of data a day from consumers. If you had one of these television sets connected to the internet, there's a good chance Vizio collected data on the shows you watched. The company even went so far as to retrofit the tracking software into some of their televisions that didn't have the software built in using updates.

So why did Vizio want to know what people were watching? The company would take the knowledge and data learned from households and their IP addresses (that's your unique internet address) and sell them to third party marketing agencies who then using it to sell targeted ads specific to households. The information included things such as sex, age, income, your level of education and home ownership. Once advertisers could pull from the groups they wanted, Vizio then allowed them to continue tracking the viewing habits of those consumers.

Vizio has agreed to cease any and all unauthorized tracking of customers and will make clear their intentions to collect and sell data based on what their consumers are viewing. In addition, the company was made to dump all previously collected data on their customers as well as institute a privacy program to monitor the company's practices. The FTC has now listed some recommendations to all other smart television providers for tips on how to avoid the same mistake. My only question is, are there more companies out there that were doing this other than Vizio? At least now there are parameters in place to keep our personal viewing habits out of ad agencies.

Mick Joest
Content Producer

Mick likes good television, but also reality television. He grew up on Star Wars, DC, Marvel, and pro wrestling and loves to discuss and dissect most of it. He’s been writing online for over a decade and never dreamed he’d be in the position he is today.