Samsung "SmartTV" Complaint
- In Merger Reviews, EPIC Advocates for Privacy, Algorithmic Transparency: EPIC has sent a statement to the Senate Judiciary Committee ahead of a hearing on the new Antitrust Chief. EPIC urged the Committee to consider the role of consumer privacy and data protection in merger reviews. EPIC warned that "monopoly platforms" are reducing competition, stifling innovation, and undermining privacy. EPIC pointed to the FTC's failure to block the Google/DoubleClick merger which accelerated Google's dominance of Internet advertising and the WhatsApp/Facebook merger which paved the way for Facebook to access confidential WhatsApp user data. EPIC also suggested that "algorithmic transparency" would become increasingly important for merger analysis. EPIC is a leading consumer privacy advocate and regularly submits complaints urging investigations and changes to unfair business practices. (May. 9, 2017)
- FTC Reaches Settlement with VIZIO Over Smart TV Tracking: The Federal Trade Commission has reached a $2.2 million settlement with smart TV manufacturer VIZIO over the company's tracking of consumers' viewing habits without their knowledge or consent. The FTC's complaint alleged that VIZIO's collection and sale of viewing data was unfair and deceptive, and the settlement agreement requires the company to delete all viewing data. EPIC previously filed a complaint with the FTC over Samsung's smart TV data collection practices, including surveillance of consumers' private conversations. EPIC has also defended the privacy of consumers' TV viewing habits in a federal court case involving the Video Privacy Protection Act. (Feb. 6, 2017)
- California Enacts Innovative Privacy Protections for Drones and SmartTVs: California Governor Jerry Brown has signed laws that provide California residents with privacy protections against drones and SmartTVs. AB856 prohibits drone flight in the airspace above private property with the intent of taking photos, video, or a sound recording of a person. AB1116 prohibits the use of voice recognition on SmartTVs unless consumers are "prominently inform[ed]" during the initial setup of the TV. The new California law also prohibits the use of voice recording for advertising purposes. Earlier this year, EPIC filed a complaint to the Federal Trade Commission about Samsung's SmartTVs and recommended new consumer safeguards. EPIC has also recommended drone privacy safeguards to the US Congress, the FAA, and State courts. (Oct. 9, 2015)
- Campaign for a Commercial-Free Childhood Protests Eavesdropping Barbie: The Campaign for a Commercial-Free Childhood has launched a campaign and petition to protest Mattel's "Hello Barbie." The toy is a WiFi-connected doll with a built-in microphone. Hello Barbie records and transmits children's conversations to Mattel, where they are analyzed to determine "all the child's likes and dislikes." The advocacy group explained that Hello Barbie is "a significant violation of children's privacy...Kids using 'Hello Barbie' won't only be talking to a doll, they'll be talking directly to a toy conglomerate whose only interest in them is financial." EPIC has participated in numerous campaigns to safeguard childrens' privacy and recently filed a complaint with the FTC about Samsung's always on "SmartTV." (Apr. 2, 2015)
- EPIC Challenges Samsung's Surveillance of the Home, Files FTC Complaint: EPIC has filed a complaint to the Federal Trade Commission about Samsung's SmartTvs. "Samsung routinely intercepts and records the private communications of consumers in their homes," EPIC wrote. EPIC detailed widespread consumer objections and charged that "privacy notices" do not diminish the harm to American consumers. In setting out the privacy violations, EPIC cited the FTC Act, the Children's Online Privacy Protection Act, The Cable Act, and the Electronic Communications Privacy Act. EPIC also noted a recent speech of FTC Chair Edith Ramirez about privacy and consumer products. EPIC asked the FTC to enjoin Samsung and other companies that engage in similar practices. (Feb. 24, 2015)
The market for voice-recognition technology has rocketed as companies embed internet-connected devices (from smartphones, televisions, and cars to refrigerators, thermostats and coffee makers) with listening capabilities and voice-activated features. Samsung first announced its voice-activated television at the Consumer Electronic Expo in 2012. Samsung's "Smart Touch" remote control has a built-in microphone for voice recording. Other models include a camera and additional microphones to record voice and hand gesture.
Samsung is the leading provider of smart TVs, with nearly a thirty percent share of the “Smart TV” market as of 2013. SmartTV sales reached more than 90 million worldwide in 2013. Sales are expected to grow to 228 million by 2018. Other market forecasts estimate that Smart TV sales will reach 141 million in 2015. Samsung has marketed the convenience of its voice-recognition capable SmartTV, but has not adequately addressed the privacy consequences of its SmartTV’s configuration.
Samsung's "Always-On" Voice Recorders
Samsung has identified the third party as Nuance, a voice-to-text recognition company. Samsung attempts to disclaim liability for any third party data privacy or security practices, including Nuance’s data privacy and security practices. Under the heading “Third Parties,” Samsung states: “Please note that when you watch a video or access applications or content provided by a third-party, that provider may collect or receive information about your SmartTV (e.g., its IP address and device identifiers), the requested transaction (e.g., your request to buy or rent the video), and your use of the application or service. Samsung is not responsible for these providers’ privacy or security practices. You should exercise caution and review the privacy statements applicable to the third-party websites and services you use.”
Samsung has represented that it encrypts the voice communications it transmits to Nuance. Samsung claims it, “takes consumer privacy very seriously and our products are designed with privacy in mind. We employ industry-standard security safeguards and practices, including data encryption, to secure consumers’ personal information and prevent unauthorized collection or use.” However, a computer researcher determined that Samsung does not encrypt all the conversations it records and transmits to Nuance. Samsung later conceded that the company does not encrypt all the voice recordings it transmits. Samsung also admitted it has not deployed the software necessary to encrypt plaintext transmissions.
On February 24, 2015, EPIC filed a formal complaint with the Federal Trade Commission regarding Samsung’s deceptive and unfair trade practices and violation of the Children’s Online Privacy Protection Act, the Electronic Communications Privacy Act, and Cable Communications Policy Act. The complaint concerns the consumer privacy violations of Samsung’s “always on” SmartTV. Samsung deceived consumers by not effectively disclosing the spying capabilities of its Smart TV, leaving the majority of its consumers unaware that their SmartTV is routinely intercepting and recording the private communications of consumers in their homes. “Samsung’s attempts to disclaim its intrusive surveillance activities by means of a ‘privacy notice’ do not diminish the harm to American consumers.”
The Federal Trade Commission Act (“FTC Act”) prohibits unfair and deceptive acts and practices, and empowers the Commission to enforce the Act’s prohibitions. Under the Act, a business practice is deceptive if it “involves a representation, omission or practice that is likely to mislead the consumer acting reasonably under the circumstances,” and is “material,” or meaningful to the consumer. An unfair act under Section 5 are those that “cause or [are] likely to cause substantial injury to consumers which [are] reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”
In the Complaint, EPIC charged Samsung with engaging in deceptive business practices in violation of Section 5 of the FTC Act. EPIC explained that Samsung “deceptive[ly] fail[ed] to disclose that Samsung records and transmits private conversations through its SmartTV.” EPIC explained that SmartTV users had been misled, as they were typically unaware that their televisions were recording and transmitting their private conversation. Additionally, Samsung had represented to consumers that it encrypted all recorded transmissions, but in reality transmitted some recordings unencrypted. Further, when users found out that SmartTV was recording them in their home, they expressed extreme outrage, indicating that this misrepresentation was material to consumers. Thus the failure to adequately disclose that the commitment to privacy was subject to reversal constituted a deceptive act in violation of Section 5 of the FTC.
EPIC charged Samsung with violating the Children’s Online Privacy Protection Act (COPPA) by knowingly collecting and recording the personal information of children under the age of 13. COPPA regulates the collection of children’s personal information by operators of online services. Operators of online services directed to children under the age of 13 must comply with COPPA. Operators of online services serving a general audience must comply with COPPA when the operator has “actual knowledge that it is collecting or maintaining personal information from a child.” To comply, operators must obtain parental consent before collecting children’s personal information and data. Prior to consenting, parents must be given notice as to what information it collects, how it uses such information, and the extent to which the information is disclosed to third parties as well as a means for parents to review the information collected.
Samsung claims that it does not knowingly market its SmartTV to children, however it admits that families with children under age 13 buy the SmartTV, and the SmartTV routinely records and transmits conversation, including children’s voices. Additionally, Samsung specifically markets features of the SmartTV to young children. Its website boasts programming specifically designed for pre-school aged children and encourages parents to have their children interact with its SmartTV.
Additionally, EPIC charged Samsung with violations of the Electronic Communications Privacy Act (ECPA) and the Cable Communications Policy Act (CCPA). Samsung violated the ECPA’s prohibition on the interception and intentional disclosure of a person’s wire, oral, and electronic communications. Under the CCPA, Samsung was required to obtain its consumers’ written or electronic consent to its recording of their private conversations and transmittance to Nuance.
- Paul Levy, Privacy is fast becoming the real disruptive force in digital technology, The Conversation (Feb. 11, 2015)
- Federal Trade Commission, Complying with COPPA: Frequently Asked Questions (last visited Feb. 11, 2015)
- Matt Kwong, Samsung SmartTV an 'absurd' privacy intruder, Ann Cavoukian says, CBC News (Feb. 10, 2015)
- Natasha Lomas, Today in Creepy Privacy Policies, Samsung's Eavesdropping TV, Techcrunch (Feb. 8, 2015)
- Opening Remarks of FTC Chairwoman Edith Ramirez at the International Consumer Electronics Show, Privacy and the IoT: Navigating Policy Issues (Jan. 6, 2015)
- Fed. Trade Comm’n, FTC Policy Statement on Deception (1983)
- Fed. Trade Comm’n, FTC Policy Statement on Unfairness (1980)
- Martin Blanc, EPIC Files Official FTC Complaint Against Samsung’s (SSNLF) Smart TVs, BidnessEtc (Feb. 26, 2015)
- Mariella Moon, Privacy advocates want the FTC to investigate Samsung's smart TVs, Engadget (Feb. 26, 2015)
- Secure World (Feb. 26, 2015)
- Ashlee Kieler, Privacy Advocates Call for Investigation into Samsung Smart TVs, Consumerist (Feb. 26, 2015)
- Stephanie Mlot, FTC Should Probe Samsung Over Smart TVS, Group Says, PC Magazine (Feb. 26, 2015)
- Jeff Stone, Privacy Advocates Want FTC Probe into Samsung SmartTV Voice Collection, International Business Times (Feb. 26, 2015)
- Megan Geuss, Privacy Advocate Tells FTC that Samsung Smart TVs are ‘Deceptive’, Arstechnica (Feb. 26, 2015)
- Nick Wingfield, Privacy Group Files F.T.C. Complaint Against Samsung’s Voice-Operated TVs, New York Times (Feb. 25, 2015)
- John Ribeiro, PIC files FTC complaint about Samsung's Smart TV 'surveillance', ComputerWorld (Feb. 25, 2015)
- Steven Musil, Samsung May Face FTC Probe Over Voice-Recognition TVs, CNET (Feb. 25, 2015)
- John Ribeiro, Samsung Faces Complaint in U.S. Over SmartTV ‘Surveillance,’ CIO (Feb. 25, 2015)
- Anna Werner, Is SmartTV Getting Too Smart?, CBS News (Feb. 8, 2015)
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by Ryan Calo, A. Michael Froomkin,