Spying on customers isn’t new. Sometimes it’s official, like when Yahoo allegedly monitored customers’ emails under a secret government directive. Then there were the rent-to-own PC companies that installed key stroke loggers to gather sensitive and even intimate data and photos about consumers.
The latest example is large in scale. Consumer electronics manufacturer Vizio won praise from NDP Group last summer for its historical industry disruption. But the Federal Trade Commission has had a less complementary view because Vizio allegedly spied on millions of its television set customers. The company settled with the FTC and the State of New Jersey on February 6 for $2.2 million over collecting the viewing history of 11 million smart televisions without consumers’ permission.
According to the complaint, starting in February 2014, Vizio installed proprietary software that would “continuously track what consumers are watching, and transmit that information” to the company. The software was turned on by default. The company also remotely installed the software on televisions it had sold between 2010 and 2014.
The sets would transmit consumer viewing habits “on a second-by-second basis” by capturing part of the image on the screen and matching it to a database of available programming, whether over-the-air, cable, set-top boxes, streaming devices, or DVD players. You watched it, they noted it and kept the data indefinitely. Vizio would also record other data, including “IP address, wired and wireless MAC addresses, WiFi signal strength, nearby WiFi access points, and other items,” so, among other things, they could probably accurately identify physical location.
When a November 2015 news article first reported on the practice, the complaints started arriving at the FTC. Vizio neither admitted to nor denied the allegations in the settlement.
Vizio was sold to China-based consumer electronics conglomerate LeEco last year. According to NDP, a series of market mistakes on Vizio’s part “likely led to the financial results that forced this sale.” You might wonder whether this choice was one that helped put the company over the edge.
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