Consumer electronics company Vizio, a manufacturer and seller of internet-connected smart TVs, has agreed to pay $2.2m (£1.8m) to settle a lawsuit accusing it of unlawfully collecting the viewing data of customers on more than 11m of its TVs.

The case, brought by the Federal Trade Commission (FTC) and the Office of the New Jersey Attorney General, accused the California-based company of manufacturing smart TVs that capture information about video displayed on the smart TV – without informing the customer of these settings. In addition, the complaint also says that the company tied specific demographic information – such as sex, age, and income – to the viewing data.

“Vizio collected unique data from each household with a Vizio smart TV that included not only second-by-second viewing information, but also the household’s IP address, nearby access points, zip code, and other information,” said Kevin Moriarty, attorney for the division of privacy and identity protection at the FTC, in a blog post. “They also shared that information with other companies.”

The $2.2m payment includes a payment of $1.5m to the FTC and $1m to the New Jersey Division of Consumer Affairs – with $300,000 of that amount suspended.

As a result of the settlement, Vizio is required to disclose all of its data collection and sharing activities, and gain permission from the owners of its TVs. Furthermore, it must also delete most of the data it already has and put in place a privacy program.

“Vizio is pleased to reach this resolution with the FTC and the New Jersey Division of Consumer Affairs.  Going forward, this resolution sets a new standard for best industry privacy practices for the collection and analysis of data collected from today’s internet-connected televisions and other home devices,” said Jerry Huang, Vizio general counsel, in a statement. “The ACR program never paired viewing data with personally identifiable information such as name or contact information, and the Commission did not allege or contend otherwise.  Instead, as the Complaint notes, the practices challenged by the government related only to the use of viewing data in the ‘aggregate’ to create summary reports measuring viewing audiences or behaviors.”

“Today, the FTC has made clear that all smart TV makers should get people’s consent before collecting and sharing television viewing information and VIZIO now is leading the way.”

Connectivity no longer just means mobile. It spans everything from Bluetooth beacons to smart home assistants, and offers brands a whole new set of ways to target and engage with consumers. To find out the challenges and opportunities this brave new world of technology offers, book you place at our Connected Consumer Summit, 16 February 2017 in London.