Vizio’s Secret Opt-Out Prompts Privacy Lawsuit | Vanderbilt Journal of Entertainment & Technology Law

Earlier this month Palma Reed filed a lawsuit against Vizio, a large manufacturer of televisions, over use of its customers’ data. Ms. Reed bought two Vizio televisions—one from Sam’s Club and one from Costco—only to find out later that Vizio was collecting data on the shows and other content being played through the TV. The feature, called “Smart Interactivity,” allows Vizio to determine that, for instance, “an individual watched Scandal on a Thursday at 8:00 pm pacific time with an IP address of and a Wifi router MAC address of 04:bd:88:7a:1c:c1.” The suit then alleges that Vizio did not scramble this information and sent it to data brokers, who matched the IP address and compiled a complete profile of the viewer.

The “Smart Interactivity” feature is not unique in the market; several of the other large television manufacturers’ televisions have similar capabilities. However, Vizio is unique in that it gives the customer the ability to opt-out, while the other companies let users opt-in. This news seems to have made many customers unhappy, judging by the large number or consumer protection groups that have spoken out. Even so, others have pointed out that this business model has allowed Vizio to sell the actual televisions for cheaper, because it is still generating a revenue stream after the sale, thereby benefitting consumers.

The plaintiff is “seeking class certification, an injunction, and statutory and punitive damages for false advertising, fraud, negligent omission, unjust enrichment, and violation of the Video Privacy Protection Act.” Under the Video Privacy Protection Act, cable service providers and video rental services are prohibited from selling their customers viewing information. This particular suit does not implicate the Fourth Amendment, because Vizio is a not a state actor. However, this information could very well be used in criminal cases to determine the location of an individual or whether an individual was or is at home. If such a fact pattern makes it to the courts, the debate will be quite similar to the debate about the constitutionality of collecting historical cell site location information.

Vizio will argue that it does not count as a cable service provider or video rental service, so the Act does not apply to them. Furthermore, several other companies have skirted the Act by anonymizing (encrypting the IP addresses) and aggregating the data. For instance, another disgruntled customer sued Roku under the Video Privacy Protection Act. The district court ruled in favor of Roku because, in its view, sending anonymous data to third parties is not prohibited by the Act. Under that same framework, it seems likely that the case will largely revolve around an evidentiary question: did Vizio scramble the data it gave to the data brokers or not?

David Creasy



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