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Financial Services Law Insights and Observations

Top "Smart TV" Manufacturer Agrees to Pay $2.2M to Settle FTC Smart TV Tracking Investigation

FTC Miscellany State Attorney General Privacy/Cyber Risk & Data Security

Privacy, Cyber Risk & Data Security

On February 6, the Federal Trade Commission (FTC) and the New Jersey Attorney General (NJAG) announced that they had entered into a $2.2 million settlement to resolve claims that a “smart” television manufacturer secretly gathered users’ viewing data and sold it to third parties who used the data for targeted advertising purposes. The settlement, which was approved by the FTC by a unanimous 3-0 vote, includes a payment of $1.5 million to the FTC and $700,000 to the New Jersey Division of Consumer Affairs, with an additional $300,000 in penalties to New Jersey suspended. The settlement also requires that the TV maker not misrepresent its data collection and sharing practices, prominently disclose its data collection and sharing practices and obtain permission from each consumer prior to collecting viewing data, delete most of the viewing data it already collected, implement a comprehensive privacy program, and undergo biennial third-party privacy assessments.

Notably, in a concurring statement, acting FTC Chairman Maureen K. Ohlhausen emphasized that this settlement marks “the first time the FTC has alleged in a complaint that individualized television viewing activity falls within the definition of sensitive information.” Previously, the FTC had limited the definition of sensitive information to “financial information, health information, Social Security Numbers, information about children, and precise geolocation information.” Chairman Ohlausen noted “the need for the FTC to examine more rigorously what constitutes ‘substantial injury’ in the context of information about consumers” and indicated her intention to “launch an effort to examine this important issue further.”

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