Data-Mining Litigation Builds Against Vizio Smart TVs
Vizio, based in Irvine, Calif., is facing a growing list of angry customers who have filed class action complaints against the privately held TV maker for allegedly collecting data about their viewing habits without their knowledge and selling it to third parties.
Last week, a U.S. Judicial Panel on Multidistrict Litigation heard an argument on motions to consolidate 16 of 20 class-action complaints from several states into one case and transfer it the U.S. District Court in Santa Ana, CA.
More than 20 class-action lawsuits have been filed since November 2015 against Vizio and in some cases its data-mining asset Cognitive Media Networks, which developed Vizio’s Inscape content-tracking technology. Certain Vizio smart TVs have incorporated an Inscape tracking feature designed to monitor viewing patterns and gather information that can be used by advertisers and programmers for various purposes.
In an official statement Thursday, Vizio said: “We are pleased with the court’s decision to transfer the cases to The Central District of California, Santa Ana division. We continue to believe the lawsuits are factually wrong, based on inaccurate speculation, and legally without any merit. Vizio will aggressively defend our company against this matter.”
Read more on the data mining class action case against Vizio after the break:
The complaints allege, among other things, that Vizio (and sometimes Cognitive Networks) failed to adequately disclose that Vizio Smart TVs have this tracking software and that their viewing activities are being tracked and recorded without their knowledge or consent.
In many of the cases the complainants allege that average consumers aren’t familiar with data gathering practices, don’t have the technical knowledge to discover the presence of tracking software in their TVs to turn it off and typically expect companies to adequately disclose such systems and practices before they purchase and use their television sets.
Some of the cases have sought maximum financial penalties for violation of the Video Privacy Protection Act, because certain Vizio smart TV models carry the Inscape viewer-tracking feature that gathers information about consumers’ viewing patterns, some of which Vizio and partners then sell to third parties, such as advertisers and programmers.
Although Vizio is the target of the recent legal activity, it should be pointed out that it is not the only company that monitors and collects viewer or TV usage activity from connected products.
As previously reported here, companies including: Google, LG, Samsung, Sony and others have been tracking user activity on various electronic devices, although most, including Vizio, say that viewing data is typically linked to more or less anonymous IP addresses.
Most of these TVs, including Vizio’s, give users the ability through their menu systems to opt out (or shut off) this data collection, and continue using the smart TV features. Although, some of these opt-out controls are not that easy to find. Vizio turns the data collection on by default in its TVs.
Vizio disclosed its use of data mining technology as a new revenue stream from its high-value, low-priced smart TVs last July, when the company attempted to raise $172.5 million through an initial public offering. In that statement, Vizio listed among its revenue sources the sale of customer viewing data gathered through its smart TV platform.
At the time, the company said it intended to use the data to “deliver the ultimate entertainment experience through our community of connected consumers, advertisers and media content providers.”
Vizio said at the time of the IPO filing that users have the ability to turn off the viewer monitoring, and warned prospective investors of the potential for negative backlash from privacy watchdog groups.
“We collect, process, store, use and to some extent disclose information collected from or about purchasers and users of our products, and from the devices themselves. The collection and use of personal information, and analysis and sharing of anonymous user data and unique identifiers to inform advertising or analyze viewing behaviors subject us to legislative and regulatory burdens, may expose us to liability, and our actual or perceived failure to adequately protect consumer data could harm our brand, our reputation in the marketplace and our business,” the IPO stated.
Vizio’s IPO statement indicated its Smart TVs are programmed to collect specific viewing information, “in association with non-personal information (which we define in our posted privacy policies as a data element or elements in a form that does not alone permit direct association with a specific person).”
Reports of class action complaints against Vizio’s alleged data mining TV practices have been popping up in reports across the country for the past five months. Fair advertising practices group Truth In Advertising compiled links to seven of the class action complaints against Vizio here.
In addition, the Indianapolis Star reported that Indiana resident Trent Strader filed a class action complaint in February against Vizio for his alleged unwitting exposure to data mining activity after purchasing a TV.
“What people don’t understand in this era of interactive activity is who has access to your information and what they know about you,” Lynn Toops, an attorney at Cohen & Malad, who is representing Strader, told the Indianapolis Star. “Consumers need to understand that if they connect this TV to the Internet, Vizio is collecting information and sending it to advertisers.”
More recently, Isaac Altman of Brooklyn, N.Y. filed a class action complaint against Vizio’s data harvesting TVs on Wednesday in the Federal District Court in Manhattan, according to a report in Consumer Electronics Daily, a CE industry newsletter. The complaint states Altman had no prior knowledge that the Vizio TV he bought in September used viewer tracking capability, that he would not have purchased it if he had and that he didn’t give his consent to Vizio to monitor his use of the TV or the private Wi-Fi network to which it was connected.
By Greg Tarr
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