As dataxu continues to spearhead innovation in the data-driven Advanced TV space, we do so acutely aware of the need to balance effective data strategies with consumer data privacy concerns.
While adtech has traditionally relied on effective self-regulation programs for the protection of consumer privacy, a shift in the way viewers watch TV content has created heightened awareness to the Video Privacy Protection Act (VPPA) and the Federal Trade Commission’s (FTC) enforcement capabilities when it comes to privacy protection.
The FTC and VPPA in action: Internet-connected Smart TVs
Early in 2017, Vizio, one of the world’s largest manufacturers and sellers of internet-connected Smart TVs, reached an agreement with the FTC and the Office of the New Jersey Attorney General in response to charges that they had installed software on Smart TVs which enabled the collection of viewing data on millions of consumers without their knowledge or consent. The agreement required Vizio to pay a $2.2 million-dollar fine and change its notice, choice, data collection, and use practices.
Along with the sanctions imposed by the FTC, Vizio also faces a consumer class action in the U.S. District Court for the Northern District of California, that alleges that the company’s actions had violated the VPPA. This case is still unfolding. Most recently, a United States District Judge denied Vizio’s motion to dismiss the class action, finding that Vizio customers’ claims were “sufficiently concrete” to bring suit under the VPPA.
A closer look at the VPPA
Enacted in 1988, the VPPA addressed the behavior of video rental storefronts: think Blockbuster Video or other local providers. The intent of the VPPA is to prohibit any person engaged in the business of rental, sale, or delivery of pre-recorded video cassette tapes, or similar audio-visual materials, from disclosing a consumer’s “personally identifiable information” (PII) to a 3rd-party without the individual’s opt-in consent.
The VPPA defines PII as “information which identifies a person as having requested or obtained specific video materials or services from a video tape service provider”.
Recent VPPA developments: How they impact the future of data-driven TV solutions
As dataxu is a leader in data-driven TV solutions, our legal team has been closely monitoring this space. A recent Ninth Circuit case involving the VPPA caught our attention: Eichenberger v. ESPN.
Appeals Court upholds ESPN win in VPPA suit
In Eichenberger v. ESPN, a federal circuit court—a federal appeals court just below the Supreme Court—found that ESPN’s sharing of a user’s streaming device ID number with a 3rd-party did not constitute as a violation of the VPPA. The court opted to apply an “ordinary person” test to the interpretation of the type of information that constitutes PII under the VPPA requiring opt-in consent. The Court concluded that the opt-in requirement only applied to information that would “readily permit an ordinary person to identify a specific individual’s video-watching behavior”.
Under Eichenberger, a platform like ESPN’s streaming app may share user content viewing data with 3rd-parties as long as an ordinary person could not identify the person. In this case, the content viewing data was linked to a mobile ID, and thus not capable of identifying a specific individual. This represents a powerful use case for potential addressable television advertising, and an important step towards interpreting the VPPA in a way that allows platforms to share rich content viewing data without requiring opt-in consent.
While the Eichenberger case provides online video service providers, like ESPN, with some guidance on how to ensure compliance with their requirements under the VPPA—and results in a potentially favorable outcome for the online streaming service and its advertising technology partners— interpretations of the law will continue to evolve. This is particularly true as the courts struggle to apply a 1988 statute to 21st-century technology which has the tendency to move at the speed of light.
For now, we view this decision as an important piece of the analysis when working with forward-thinking marketing professionals who are working with dataxu to push the envelope in TV.
Interested in discussing the evolution of the VPPA as it relates to your Advanced TV strategies? Feel free to contact our legal team at firstname.lastname@example.org.