FTC debates legality of TiVo policies

Apr 16, 2001  •  Post A Comment

The Federal Trade Commission is reviewing the privacy policies of TiVo to gauge whether the company violates its own restrictions by collecting data on the viewing habits of individual customers without their knowledge and consent.
The inquiry was prompted by a March 27 letter from three Democratic lawmakers concerned about the findings of a recent study by the Privacy Foundation, a Denver-based watchdog, and the University of Denver Privacy Center.
The groups concluded that TiVo tracks personal viewing habits while promising not to do so and could easily identify the patterns of individual users if it wanted to. The company denies the charges.
“The simple fact is that most consumers are not comfortable with having someone or something watch them while they watch television,” the congressmen wrote. “TiVo would appear to be in violation of its commitment that it would not have access to personally identifiable information without prior customer consent.”
The FTC inquiry could have implications for the broader interactive television marketplace, as the interests of advertisers, TV programmers and marketers are pitted against consumers and privacy advocates.
At stake is access to a potential gold mine in viewer information that could help interactive TV companies target ads and programs at customers.
“These concerns are cropping up in different areas all the time,” said a source who spoke on condition of anonymity.
TiVo manufactures personal video recorders that use computer hard drives to let customers store extensive amounts of programming, fast-forward through commercials, pause and restart shows without interruption and record by subject, category or actor.
Each day, TiVo transmits the latest TV schedules to the units via phone lines, collecting information at the same time from each TiVo recorder.
The congressmen who filed the complaint are Rep. John Dingell of Michigan, Rep. Ed Markey of Massachusetts and Rep. Edolphus Towns of Maryland.
Reps. Dingell, Markey and Towns are ranking Democrats, respectively, on the House Energy and Commerce Committee, House subcommittee on telecommunications and the Internet and House commerce, trade and consumer protection subcommittee.
The FTC will inform them on or by April 23 whether it will conduct a full-fledged investigation, impose penalties, demand remedial action or take no action.
The lawmakers are particularly concerned that the data collected by TiVo contains each viewer’s serial number, making it possible for TiVo to link the information with customer account numbers so it can review the TV-watching patterns of consumers.
TiVo insists that the serial numbers are severed from the personal information it collects as soon as the data leaves one of its units.
“There’s no way that we can connect the information,” said TiVo spokeswoman Rebecca Baer.
TiVo says it never collects personal information from customers without their consent. The only data it collects, it says, is “aggregate, anonymous” data, which it admits to sometimes sharing with others in the TV industry.
Sources said the FTC has a strong track record of taking action against companies found to be violating their own privacy restrictions.
The lawmakers are seeking possible action by the agency under its regulations governing “unfair or deceptive practices.”
Nevertheless, as of late last week, it appeared that staffers with the agency’s Bureau of Consumer Protection who were conducting the inquiry had not decided what steps, if any, to take.