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Vizio Pays Fines to FTC and NJ for Information Privacy Violations

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For anyone confused about what's a consumer privacy violation and what's fair, here's where it stands: Collecting and selling consumer viewing data is allowed as long as the collection is disclosed and consumers have the choice to opt out.

That's the upshot of the fines imposed on TV-maker Vizio yesterday by the Federal Trade Commission (FTC) and the state of New Jersey. Vizio is paying $1.5 million to the FTC and $1 million to the NJ Division of Consumer Affairs, with $300,000 of the NJ fine suspended. The crime was not collecting data, but how Vizio went about it.

In February 2014, Vizio began tracking consumer viewing data on both new and existing connected TVs—a total of 11 million consumer TVs, the FTC notes. Vizio told consumers it had created a personalized recommendation service called ACR, but didn't disclose the extent of the tracking, which included IP addresses and demographic data including sex, age, income, marital status, household size, education level, home ownership, and household value. Vizio then sold this information so advertisers could monitor how often ad exposure led to program viewing. The company began sharing collected data in May 2014 and selling targeted ad data in March 2016.

All that would be allowed if there were proper disclosures. Vizio didn't explain what it was collecting or that tracking was taking place, and didn't do enough to explain how consumers could opt out through settings.

"Today, the FTC made clear that all smart TV makers should get people’s consent before collecting and sharing television viewing information and Vizio now is leading the way,” said Jerry Huang, Vizio's general counsel.

Vizio will delete data collected before March 1, 2016 and will get viewer consent when tracking in the future. It also needs to create a data privacy program and have it assessed biannually. As Extreme Tech points out, the fine is "ludicrously small" for the number of people harmed. Expect consumers to get more savvy about privacy protection in the years to come.

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