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If you bought a Vizio smart TV within the last two years, there's a good chance that TV automatically tracked what you were watching without asking for your permission, according to a complaint filed by the Federal Trade Commission and the State of New Jersey. Today, the California-based TV manufacturer agreed to pay $2.2 million to settle the charges and to more prominently disclose when and how it collects user information.

Since February 2014, software installed on the televisions allowed Vizio to continuously collect customer's viewing history through software called “ACR,” or automated content recognition. This software captures a selection of pixels displayed on Vizio smart TV screens and sends that data to the company's servers, where those pixels are compared to a database of different TV shows, movies, and commercials. ACR can also collect information like your Wi-Fi signal strength, nearby Wi-Fi access points, and IP addresses.

The complaint alleges that over 100 billion data points per day (information like what content you're watching and how long you're watching it) from more than 10 million Vizio televisions have been collected, and the company planned to store this data on their servers indefinitely. A stipulated federal court order requires that Vizio delete all data collected before March 1, 2016. An anonymized version of the data that did not include customers' name or contact information was sold to third parties for advertising and audience measurement purposes.

In a provided statement, Vizio's general counsel Jerry Huang said, “The ACR program never paired viewing data with personally identifiable information such as name or contact information.” Huang also stated that, “Today, the FTC has made clear that all smart TV makers should get people's consent before collecting and sharing viewing information and Vizio is now leading the way.”

As a part of the settlement, Vizio did not admit or deny the FTC's allegations.

The FTC charged Vizio for violating Section 5 of the FTC Act, which prohibits deceptive and unfair acts affecting consumer privacy. In September, the FTC clarified this section as it relates to smart TVs. New guidelines for smart TV manufacturers include explaining data collection practices up front, requiring consent before collection, and making privacy settings easy to understand.

According to the FTC's complaint, Vizio did not make it clear to customers that they intended to collect their TV viewing history, and the collection was turned on by default, which did not give customers a chance to opt out. A key part of the complaint is that Vizio promised customers recommendations based on the data collected, but never provided them to owners of older Vizio TVs.

In a separate statement, acting FTC Chairperson Maureen Ohlhausen said she agreed Vizio should have been more explicit about its data collection, but is further investigating if those practices are likely to cause “substantial injury.” Ohlhausen tweeted that she intends to start a dialogue about whether TV viewing history should be considered sensitive information, like health care or financial records.

If you own a Vizio TV, you can disable data collection by going to your TV's Menu > Settings > Smart Interactivity, or any option with Automated Content Recognition, and turning it off.

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