Company / division: FTC
Consistent with the FCC’s position on internet privacy rules, it appears it wants to shift enforcement of net neutrality principles to the FTC as well, which also suggests Ajit Pai isn’t opposed to net neutrality rules in some form, though perhaps a watered down one. Importantly, though, the FTC doesn’t have prescriptive rule making power in these areas, typically only acting after the fact to punish breaches of rules or regulations, which is a subtle but important shift in how net neutrality has been regulated so far. And as with internet privacy, it’s entirely possible that we’ll see a similar break between when the FCC ditches rules and the FTC picks them back up again, which will no doubt lead to a similar outcry to the one we’ve just seen over those privacy rules.
FCC and FTC Heads Outline Policy on Internet Privacy (Apr 5, 2017)
In an op-ed in the Post this morning, the chair of the FCC and acting chair of the FTC write up their views on the internet privacy debate that’s been roaring in online tech publications over the last few weeks. As I’ve said previously (and discussed in depth in last week’s News Roundup podcast), the reaction on this topic has been overblown, and understanding poor, though the major players on the other side haven’t really helped themselves. The major ISPs only began communicating on the topic after the congressional vote was over, and only now are the FCC and FTC chairs communicating clearly about the issue. But the reality is that this issue of internet privacy can only really be resolved by new regulation from the FTC, which will end up once again having responsibility for online privacy as it did until 2015.
It turns out Vizio has been collecting extremely granular data on users of its smart TVs, and then matching its IP data with offline data about individuals and households (essentially everything short of actual names). And it’s done all this without making users properly aware that this was what it was doing. The data related to everything consumers watched on the TVs, whether the content came through Vizio’s own smart TV apps or merely through one of its inputs from another box or antenna. Something I’d forgotten was that Vizio filed an S-1 in preparation to go public back in 2015 – it never actually went public because Chinese player LeEco decided to acquire them (a deal due to close shortly). Aside from talking about how many TVs the company sells, the S-1 makes a big deal of of the “up to 100 billion viewing data points daily” it collects from 8 million TVs, and touts its InScape data services, which package up this data for advertisers, although it says this data is “anonymized”, which feels like an alternative fact at this point. The risk factors in the filing even mention possible regulatory threats to such data gathering, so it’s probably fair to say that Vizio shared more information with its potential investors about the data it was collecting than it did with end users. To settle the case, Vizio has to pay a total of $3.7m in fines to the FTC and the state of New Jersey (whose AG brought the suit with the FTC), discontinue the practice, and disclose it to consumers. I can’t wait to see how it manages that last point – imagine turning on your Vizio TV one day and seeing a message pop up about the fact that it’s been tracking your every pixel for the last several years. Assuming that’s done right, it could be the most damaging part of it this for Vizio, which made over $3 billion in revenue in its most recently reported financial years. Meanwhile, yet another headache for LeEco to manage.