On October 4, 2018, Internet of Things (“IoT”) device manufacturer Vizio Inc. agreed to settle (subject to court approval) a consolidated class action lawsuit alleging that the smart TV maker collected and sold customers’ viewing histories to third party advertisers without the customers’ consent for $17 million, in addition to agreeing to take additional affirmative steps to supplement its on-screen data collection practice disclosures.
Reports that Vizio smart TVs tracked users’ show viewing histories and then distributed this personal information to advertisers without user consent were initially published in November 2015 by ProPublica.
Subsequently, various filed class action suits were consolidated in California’s Central District in April 2016 and subsequently survived Vizio’s motion to dismiss. The suits alleged federal and state claims including state law privacy claims including causes of action under the California Invasion of Privacy Act and the Massachusetts Privacy Act and alleged that Vizio failed to adequately disclose its surveillance practices and obtain consumers’ express consent before collecting information in addition to state consumer protection laws by installing automatic content recognition software on 16 million of its IoT smart TV devices that collected information about users’ show viewing histories, as well as users’ IP addresses and MAC addresses among other personal data.
On October 4, 2018, the parties jointly moved for preliminary settlement approval. This suit was filed, and has been proposed to be settled, before the California Consumer Privacy Act of 2018 becomes effective on January 1, 2020.
The Vizio case underscores the importance of:
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incorporating privacy by design as an integral part of product development processes for IoT device manufacturers;
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ensuring that privacy policies are clear, straightforward, and complete regarding disclosure of consumers’ personally identifiable information;
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understanding the increased pace at which privacy litigation will develop as consumers or plaintiffs’ counsel become more sophisticated about data tracking for marketing or advertising purposes; and
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obtaining users’ affirmative consent prior to collecting, using, transferring, and/or selling the users’ personal data.
The U.S. District Court for the Central District of California is scheduled to consider preliminary approval of the proposed settlement in a hearing on December 7, 2018.
With the proliferation of IoT and data use, the Vizio litigation demonstrates the increased risks arising out of privacy compliance issues for consumer protection matters, as well. Nevertheless, the content of this article is intended to provide general information regarding data privacy matters. Expert privacy advice should be obtaining regarding your specific circumstances.
