New State Privacy Regulation for Connected Televisions

California will become the first state in the nation to regulate information gathered by connected television manufactures through the televisions they sell. Assembly Bill No. 1116 ("AB 1116") was signed into law by California Governor Jerry Brown on October 6, 2015 and will take effect January 1, 2016. There are three major provisions to AB 1116. First, 22948.20 (a) requires that a person or entity must “prominently” inform users that there is a voice recognition feature during the initial setup or installation of a connected television.

22948.20. (a) "A person or entity shall not provide the operation of a voice recognition feature within this state without prominently informing, during the initial setup or installation of a connected television, either the user or the person designated by the user to perform the initial setup or installation of the connected television."

The statute does not describe what this prominent disclosure must look like, so it is up to each manufacture to decide how to actually inform users. This requirement could have been a lot stricter. As AB 1116 was making its way through the legislature, one amendment required consent. However, it was scaled back to the notice requirement that is currently in the statute.

It is important to understand that 22948.20 (a) is not limited to manufacturers. It makes every "person or entity" liable and the enforcement clause in 22948.23 (c) refers to a "person who knowingly engages." Thus, under 22948.20 (a) and 22948.23 (c) importers, resellers and others could be liable for knowingly selling connected televisions that do not contain the prominent disclosure.

Second, 22948.20 (b) and 22948.20 (c) restrict manufacturers and third parties contracted by manufacturers from selling or using "actual recordings of spoken word" collected "for the purpose of improving the voice recognition feature" for any advertising purpose. Note that this restriction seems quite narrow as it explicitly only regulates information collected to improve the voice recognition feature.

Third, the legislature included a protection against government overreaching.  The statute prevents people from forcing those providing voice recognition features into creating technology that allows law enforcement to snoop into people’s homes and businesses.

22948.20. (d) "A person or entity shall not compel a manufacturer or other entity providing the operation of a voice recognition feature to build specific features for the purpose of allowing an investigative or law enforcement officer to monitor communications through that feature."

The statute can be enforced by the California Attorney General or county district attorneys. It does not create a private right of action. With a civil penalty not to exceed $2,500 for each connected television sold or leased in violation of the statute, violations could add up to some big money.

Satellite or cable television corporations are already restricted from recording and using any conversations that take place inside a “subscriber's residence, workplace, or place of business, without obtaining the express written consent of the subscriber,” under a separate law, Section 637.5 of the Penal Code. Thus, lawmakers drafted AB 1116 so that it does not “apply to any product or service provided by a company covered under Section 637.5 of the Penal Code.”