• by Wendy Davis  @wendyndavis, July 26, 2017

Handing another defeat to smart TV company Vizio, a judge on Tuesday refused to dismiss class-action allegations that the company violated the federal wiretap law by sharing information about consumers with ad-tech companies and data brokers.

"Plaintiffs plausibly allege that Vizio intercepts the 'content' of electronic communications by using its automatic content recognition software to gather samples of the programs consumers watch," U.S. District Court Judge Josephine Staton in Santa Ana, California wrote.

The battle centers on allegations that Vizio tracks TV viewers by default, and then shares data with companies that send targeted ads to people's phones, tablets and other devices. The first video privacy lawsuit against the company was filed in late 2015, less than one week after ProPublica published a report about the company.

Staton also rejected Vizio's argument that the matter shouldn't proceed as a class action. The company argued that starting in late 2015, smart TV purchasers agreed to mandatory arbitration of disputes.

But Staton ruled that Vizio's argument was premature, given that there were still unanswered questions about the arbitration agreements. "No discovery has taken place about has taken place about the how these agreements were presented to Smart TV purchasers, whether Vizio’s arbitration agreements differed over time, and what fraction of class members may be bound," she wrote.

Earlier this year, Staton refused to dismiss claims that Vizio also violated the federal Video Privacy Protection Act -- a 1988 law that prohibits video providers from disclosing personally identifiable information about people's video-viewing history.

Vizio has asked Staton for permission to immediately appeal that ruling to the 9th Circuit Court of Appeals. That request is backed by the Data and Marketing, which says in court papers that the case will "have a direct impact on DMA and its members."

Staton has not yet ruled on that request.

The Federal Trade Commission recently brought a separate enforcement action against Vizio for allegedly engaging in an unfair practice by tracking consumers. The FTC also alleged that Vizio deceived consumers by failing to adequately explain its data practices. The company agreed to settle the charges by paying $2.2 million to the FTC and the state of New Jersey, which filed a complaint about the company.