Sony smart TV privacy suit survives as judge rejects arbitration bid

A federal judge rejected Sony’s attempt to force consumers into arbitration over claims that its smart TVs secretly collected viewing data and shared it with advertisers.SAN DIEGO (CN) — A federal judge denied a bid by Sony Electronics to send a class action to private arbitration over claims its smart TVs secretly tracked viewing habits and shared that information with advertisers, while also allowing the suit to proceed in court.The plaintiffs claim Sony embedded automatic content recognition technology into its smart TVs and used it to collect viewing data without their consent. The technology captures fragments of audio and video content, turns them into a digital fingerprint and shares them with third parties for targeted advertising. The technology also creates viewing profiles that can be shared across connected devices, such as phones.The plaintiffs claim Sony failed to meaningfully disclose this technology in its devices.Sony, which has used the technology since at least 2017, argued the plaintiffs are bound by a provision under the smart TVs’ limited warranty that requires disputes to go to arbitration and prevents them from suing in court. The provision required them to opt out within 30 days of purchase.But Senior U.S. District Judge Marilyn Huff found the company effectively hid this in a separate document.“Here, nothing outside or on the box alerted plaintiffs to additional terms and conditions, the arbitration provision itself was in a document titled ‘limited warranty,’ and nothing near the top of the limited warranty or elsewhere alerted consumers that the document contained bilateral terms and conditions that may be accepted by using the smart TV,” the George H.W. Bush appointee wrote Monday. “The language relating to arbitration was bolded and separated by a heading, but other sections also had bold headings, and the provision was in the same small print as the rest of the dense one-pager. On these facts, a reasonable person receiving Sony’s Limited Warranty had no fair notice that he should read the document for binding terms and conditions before using his Sony Smart TV, or that an arbitration provision contained therein would extend beyond the scope of the warranty.”Citing a related case, Norcia v. Samsung Telecommunications, Huff ruled reasonable consumers would not know the limited warranty also included the arbitration provision.Sony Electronics moved to dismiss all claims as untimely, arguing the statute of limitations bars the plaintiffs’ claims. However, Huff declined to dismiss at this stage, writing this argument was best suited for a motion for summary judgment.In their complaint, the plaintiffs accuse Sony Electronics of invasion of privacy under the California Constitution. They say the company continuously monitored their in-home viewing behavior and collected information that could reveal political or religious beliefs, family composition, sexual orientations and health conditions, among other things.The plaintiffs also accuse Sony Electronics of publicly disclosing private facts. They say Sony distributed their data downstream to companies such as Samba TV, a content-tracking software company, and Google, which then distributed it into a broader advertising ecosystem.Huff declined Sony’s motion to dismiss both claims.“Given the broad dissemination alleged, the court concludes that plaintiffs adequately plead disclosure,” Huff ruled.Sony’s arguments were, again, better suited during the summary judgment stage, she wrote.However, Huff dismissed the plaintiffs’ remaining 12 claims with leave to amend.On the claims Sony violated the Video Privacy Protection Act, Huff agreed with Sony that an ordinary person could not identify the plaintiffs and their video-watching behavior based on the data provided.“The complaint lacks detail as to how an ordinary person could use this information to identify Plaintiffs,” she wrote. “Indeed, the complaint and plaintiffs’ opposition to Sony’s motion to dismiss reference unique capabilities of Samba and Google, not the ordinary person.”Huff also agreed with Sony’s request to dismiss claims for injunctive relief.“As pled, the complaint fails to show why, despite now knowing of Sony’s embedded automatic content recognition system, plaintiffs still face a credible threat of harm,” she continued. “Plaintiffs do not allege a desire to re-purchase Sony smart TVs. Indeed, they repeatedly claim the opposite by stating that if they had known what they do now, they never would have purchased the smart TVs or would have paid substantially less for them.”A spokesperson for either party did not respond to requests for comment.The Japanese electronics and entertainment company has developed televisions since the 1960s. Sony Electronics is based in San Diego County, where the class action was filed.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads