February 13, 2017

consumer-privacyOn February 6, 2017, the Federal Trade Commission (“FTC”) announced that it, along with the New Jersey State Attorney General, has reached a $2.2 million consumer privacy settlement with VIZIO, Inc. (“VIZIO”), one of the world’s largest manufacturers of Internet-connected “smart” televisions.  According to the underlying complaint, in 2014 VIZIO began manufacturing smart TVs that capture “second by second information” about what consumers are watching on their television sets.  In addition, according to the complaint, VIZIO began installing similar software in older television sets that it had previously sold.  On top of collecting customer viewing data, the VIZIO television sets also captured related customer-specific Internet protocol (“IP”) addresses, wired and wireless MAC addresses, WiFi signal strength, and nearby WiFi access points.  Most importantly, VIZIO neither adequately disclosed to consumers that it was engaged in this data collection process, nor that it sold the collected data to third-parties.

What are the Terms of the Settlement with VIZIO?

Terms of Consumer Privacy Settlement with VIZIO

According to the terms of the settlement agreement, VIZIO must pay $1.5 million to the FTC, and an additional $1 million to the State of New Jersey ($300,000 of which is suspended).  In addition, to the extent that VIZIO plans to capture consumer information in the future, VIZIO must prominently disclose this fact to consumers, separate and apart from any Privacy Policy or Terms and Conditions.  Further, on a going forward basis, VIZIO must obtain express consent from consumers before engaging in such practices, and allow consumers to withdraw such consent at any time thereafter.

Protect Yourself

The FTC has been vigilant in protecting the privacy rights of consumers.  We recently blogged about a $7 million settlement that the FTC reached with a data broker for violating consumer privacy laws.  If you regularly collect, use and/or share consumer data, it is necessary that you obtain consumer express informed consent to do so.  In today’s regulatory climate, it is not sufficient to bury your consumer data practices in a long privacy policy without further disclosures. It is important, therefore, to have your privacy policies and other data collection practices reviewed by competent counsel before the FTC or a state attorney general comes calling.

If you are interested in learning more about this topic, please visit the Privacy and Data Security practice area of our website.  If you have been served with process concerning your consumer privacy practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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