Vizio settles with FTC, will pay $2.2 million and delete user data

The U.S. Federal Trade Commission (FTC) today announced that smart TV maker Vizio has agreed to pay $2.2 million to settle a case involving the TVs’ data collection techniques. Vizio allegedly collected data on what people viewed on 11 million of its TVs and then shared the data with third parties without informing people about the data collection or receiving consent.

As part of the settlement with the FTC and the New Jersey Attorney General, Vizio must also delete data that it collected prior to March 1, 2016, and implement a data privacy program that is to be evaluated twice a year, according to a statement. The commission voted 3-0 in favor of the ruling, according to the statement.

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Additionally, Vizio must “prominently disclose and obtain affirmative express consent for its data collection and sharing practices, and prohibits misrepresentations about the privacy, security, or confidentiality of consumer information they collect,” the ruling states.

Chinese technology company LeEco acquired Vizio in July 2016; one year prior to that Vizio filed to go public, but an initial public offering never occurred. The acquisition is currently in regulatory review, a spokesperson told VentureBeat in an email.

LeEco said in November that it had raised $600 million in new funding following reports of financial difficulties. LeEco is also behind the Faraday Future FF 91 electric car.

In Vizio’s S-1 filing the company showed it that it recognized its data collection practiced could be an issue.

“Furthermore, some individuals may be reluctant or unwilling to connect to the Internet through our Smart TVs because they have concerns regarding the risks associated with data privacy and security. If the wider public perceives data privacy or security concerns with respect to our Smart TVs, this could negatively impact the growth potential for the net sales of our Smart TVs and our Inscape data services,” the company wrote in an updated S-1 filing.

The company declined to comment on how many Smart TVs had Inscape data services turned off. But the filing says “our focus on connectivity has driven our consumers to make an initial connection of their Smart TVs to the Internet at an average rate of … approximately 90 percent for the 12-month period ended September 30, 2015.”

Data collection is enabled by default, as ProPublica reported in 2015.

“The ACR program never paired viewing data with personally identifiable information such as name or contact information, and the Commission did not allege or contend otherwise. Instead, as the complaint notes, the practices challenged by the government related only to the use of viewing data in the ‘aggregate’ to create summary reports measuring viewing audiences or behaviors,” Vizio general counsel Jerry Huang is quoted as saying in a statement from the company.

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Update at 12:27 p.m. Pacific: Added comment from Vizio.

Update on February 7: Added information on the LeEco acquisition.