More than half a million people who purchased Vizio smart televisions will receive approximately $16 per TV set, if the company's class-action privacy settlement is finalized, according to court papers filed late last week.
If granted approval by U.S. District Court Judge Josephine Staton in Santa Ana, California, the settlement will resolve allegations that Vizio shared information about consumers with ad-tech companies and data brokers.
The deal calls for Vizio to create a $17 million settlement fund, with around $11 million going to consumers who purchased the company's TVs between February 2014 and February 2017. Nearly $6 million goes to the attorneys who brought the lawsuit.
The tentative settlement also requires Vizio to display onscreen notices about data collection and allow consumers to either accept or reject sharing data. The company has agreed to delete previously collected data.
Earlier this year, notices about the settlement were sent to around 11 million consumers, who purchased around 16 million televisions. More than 500,000 customers, who bought approximately 655,000 smart TVs, submitted claims.
Class counsel says those numbers, reflecting a claims rate of more than 4%, show the notification procedure was adequate.
“A claims rate of more than 4% reveals a sufficient level of class engagement to infer that the settlement’s benefits were appropriately conveyed to the class. What’s more, at this rate, class members should expect to receive about $16 per TV,” lawyers for the class write in a motion urging Staton to grant the deal final approval. “That is meaningful compensation when you consider the class’s maximum potential recovery, and the amount of revenue Vizio earned from licensing the class’s viewing data.”
Class counsel says in court papers that Vizio made less than $17 million from licensing the data. The source for that statement, according to court documents, is a declaration filed by Vizio senior director of accounting Wilda Su. Her declaration was submitted to Staton last December, but is currently sealed.
The legal battle over Vizio dates to 2015.
Consumers brought a class-action alleging the company tracks TV viewers by default and shares data about video viewing with companies that send targeted ads to phones, tablets and other devices.
The consumers claimed Vizio's data-sharing violated the Video Privacy Protection Act -- a 1988 law that prohibits video providers from disclosing personally identifiable information about people's video-viewing history, without their explicit consent.
Vizio lost a key battle in the case in 2017, when Staton rejected the company's contention that the Video Privacy Protection Act doesn't apply to electronics manufacturers.
Vizio said it wasn't a video-rental store. Instead, the company said it was akin to "a building that leases space to several video-rental stores.”
Staton rejected that argument, ruling that Congress intended for the video privacy law to apply to companies that are "in the business of delivering video content."
In 2017, the Federal Trade Commission brought a separate enforcement action against Vizio over privacy. The FTC alleged the company engaged in an unfair practice by tracking consumers, and that it 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 also prosecuted the company.