Smart TV Makers Beat VPPA and Wiretap Claims Over Viewing Info Collection

Published On October 23, 2018 | By Nick Jackson and Jeff Landis | Privacy
TwitterLinkedInFacebookRedditCopy LinkEmailPrint

A New Jersey federal court has dismissed a proposed class action lawsuit against multiple “smart TV” manufacturers alleging that their televisions improperly collect information on what customers are watching on their screens. The court held that the collection activities described in the complaint did not violate the Video Privacy Protection Act (“VPPA”) because data points such as IP address, MAC address and WiFi access point are not “personally identifiable information” within the meaning of that statute. The court also held there was no violation of the federal Wiretap Act because the manufacturers were a party to the transmission of programming through their smart TVs.

Background of Complaint

In White v. Samsung Electronics America, Inc., et al., No. 17-1775 (D.N.J.), the plaintiffs alleged that smart TVs manufactured by Samsung, LG, and Sony contained software set up to capture information about a “selection of pixels on the screen” and send that data back to their own servers, together with other information about the television and its network connection (such as IP address, MAC address, and nearby WiFi access points). The manufacturers allegedly used that information in combination with third-party data sources to identify the content being watched and determine household and demographic information about the customer. The plaintiffs also alleged that some television models included a voice recognition feature that recorded conversations taking place near the television and transmitted them to the manufacturers’ server.

The Court’s Ruling

VPPA

The court held that the complaint did not allege disclosure of any “personally identifiable information.” The court relied on the reading of that definition adopted by Third and Ninth Circuit appeals courts, which construed the VPPA as prohibiting “disclosures of information that would, with little or no extra effort, permit an ordinary recipient to identify a particular person’s video-watching habits.” The court declined to follow a recent California federal court decision that allowed a VPPA claim against another smart TV manufacturer (Vizio) to proceed, noting that the decision predated the Ninth Circuit’s adoption of a narrower reading of PII. The court did not reach other arguments raised by manufacturers, including that smart TV users did not meet the statute’s narrow definition of “consumers”—a basis on which other courts have dismissed VPPA claims against app and website operators—and that the manufacturers were not “video tape service providers” subject to the statute because they merely built a platform on which third-party video apps (like Netflix and Hulu) could be installed.

Wiretap Act

Noting that the manufacturers were alleged to have acquired consumers’ information during the transmission of programming to their smart TVs, the court determined that the manufacturers were direct participants in those communications. As a result, there was no violation of the Wiretap Act, which does not prohibit interception or recording by a party to a communication. The court did not reach the manufacturers’ additional argument that collecting a “selection of pixels on the screen” and WiFi network information is not an acquisition of the “contents” of a communication, as the Wiretap Act requires.

Key Takeaways

Wiretap Act and VPPA Claims Fail Again

This decision reinforces the trend of courts rejecting efforts to apply the Wiretap Act and VPPA to the collection of device identifier and activity data on internet-connected devices and applications. In particular, the court’s ruling signals that data collection by a software platform that connects users to third-party services does not violate the Wiretap Act because the platform is a party to the communications that it facilitates. The court’s VPPA analysis also reinforces the trend recognizing that the statute is not meant to encompass device identifiers and other metadata that do not plainly identify an individual person and their video viewing habits.

Importance of Adequate Disclosure

This particular case appears to have been hampered in part by deficiencies in the complaint—the court noted the plaintiffs’ failure to tie their allegations to specific manufacturers and device models, and their heavy use of allegations based on “information and belief.” The complaint also referenced, but did not describe, disclosures made by the manufacturers about their smart TV features and the information that was being collected as part of that service. But note that another smart TV manufacturer, Vizio, has recently faced scrutiny over similar content monitoring practices and the adequacy of their disclosures from the Federal Trade Commission and class action plaintiffs, paying out nearly $20 million total in settlements. Thus, companies collecting and using consumer data through internet-connected devices and applications should continue to think carefully about how they design and implement those features, and make sure they are providing appropriate disclosures and choices to their users.

If you would like more background or help understanding the law and technologies discussed, please contact Nick Jackson or Jeff Landis.

 

About The Authors

Nick’s practice focuses on representing clients in complex litigation in federal and state courts, including the defense of class action lawsuits. Nick has represented clients in matters involving federal privacy statutes, constitutional privacy rights, intellectual property, contractual disputes, and federal and state securities laws. He also assists clients in responding to investigations by federal and state regulators, as well as handling demands for user data. In addition, he has counseled clients on the privacy, intellectual property and litigation-related aspects of significant commercial transactions.

Jeff’s practice focuses on representing clients in litigation and government investigations, with a particular focus on defending companies in complex class action lawsuits. He also assists clients in responding to formal investigations and informal inquiries conducted by the FTC, DOJ and states’ Attorney General Offices. Jeff has extensive experience in all aspects of civil litigation, including serving as trial counsel for both plaintiffs and defendants in matters pending before judges, juries, and arbitration panels.

Leave a Reply

Your email address will not be published. Required fields are marked *