BILL ANALYSIS Ó
AB 1116
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Mike Gatto, Chair
AB 1116
(Committee on Privacy and Consumer Protection) - As Amended
April 13, 2015
SUBJECT: Connected televisions
SUMMARY: Limits how spoken words and conversations captured by
Internet-connected televisions, commonly known as "smart TVs,"
can be used; requires notice and consent from consumers before
the voice recognition (VR) feature of a smart TV is enabled; and
requires smart TVs to have mechanisms to help consumers actively
control VR features. Specifically, this bill:
1)Prohibits smart TVs with VR features from being used to
collect, record, store, analyze, or transmit spoken words for
any purpose not essential to the function of the application
with the VR feature that the consumer used;
2)Specifies that advertising and the analysis of household
conversations are not essential to the function of an
application;
3)Requires a one-time opt-in consent with a separate notice to
the consumer before a VR feature on a smart TV is enabled;
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4)Requires smart TVs with VR features to have mechanisms that
allow consumers to:
a) Affirmatively choose to use of the VR feature;
b) Start and stop the VR feature; and
c) Understand when the VR feature is on and
collecting or transmitting spoken words or sounds.
5)Defines "connected television" as a device that can be
connected to the Internet, receives television signals used to
broadcast programs for entertainment, information, and
education, and reproduces them on a screen, but excludes
personal computers, tablets, and mobile phones.
6)Defines "voice recognition feature" as the function of a
connected television that allows the collection, recording,
storage, analysis, transmission, interpretation, or other use
of spoken words or other sounds, but excludes voice commands
not recorded or transmitted beyond TV.
7)Gives the Attorney General or a district attorney the power to
prosecute a manufacturer that violates or proposes to violate
these provisions by seeking injunctive relief or a civil
penalty of up to $2,500 per violation, or both, and are
cumulative.
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8)Specifies that there is no private right of action for
violation of these provisions.
9)Declares that the provisions of this bill are severable.
10)Invalidates any waiver of this bill's provisions as contrary
to public policy.
EXISTING LAW:
1)Bans, under the Electronic Communications Privacy Act of 1986,
the interception of electronic communications, such as e-mail,
radio-paging devices, cell phones, private communications
carriers, and computer transmissions. (18 United States Code
(U.S.C.) Sections 2510-2522, 2701-2711, 3121, and 1367)
2)Requires, under the federal Cable Communications Policy Act of
1984, cable TV operators to obtain written or electronic
consent before collecting or sharing individually identifiable
information about cable TV subscribers. (47 U.S.C. 601-639)
3)Gives citizens an "inalienable right" to privacy. (California
Constitution, Article 1, Section 1)
4)Prohibits, with exceptions, electronic eavesdropping or
recording of private communications by telephone, radio
telephone, cellular radio telephone, cable or any other device
or in any other manner. Violation can result in penalties of
up to $10,000 and imprisonment in county jail or state prison
for up to one year. (Penal Code (PC) Sections 630-638)
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5)Prohibits cable TV and satellite TV operators from monitoring
or recording conversations in a subscriber's residence, or
from sharing individually identifiable information on
subscriber viewing habits or other personal information
without written consent. (PC 637.5)
6)Establishes criminal and civil penalties for a violation of
cable and satellite television privacy laws, including :
a) A misdemeanor, punishable by a fine not exceeding
$3,000, or by imprisonment in the county jail not exceeding
one year, or by both such fine and imprisonment. (PC
637.5, subds. (a) and (j)); and
b) A private right of action, which any aggrieved person
may commence, for damages for invasion of privacy. (PC
637.5(i))
FISCAL EFFECT: Unknown
COMMENTS:
1)Purpose of this bill . This bill is intended to protect the
privacy of people inside their homes by requiring
manufacturers to add privacy features to smart TVs, such as
requirements for consumers notice and obtain consent before
capturing and transmitting spoken words and conversations,,
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and restrictions on the secondary use of voice data for
marketing, advertising and other nonessential uses. This bill
is authored and sponsored by the Assembly Privacy and Consumer
Protection Committee.
2)Author's statement . According to Assemblymember Gatto, the
lead author, "AB 1116 protects California consumers by
requiring manufacturers to ensure that a TV's VR features
cannot be enabled or activated without a consumer's knowledge
or consent and also by banning the secondary use of voice
data, for example for marketing and advertising purposes."
"This bill affirms the fundamental right to privacy established
in the California constitution. Nowhere is privacy more
sacred than in the comfort of a person's home. As Justice
Scalia noted in Kyllo v. United States, when speaking about
the home, 'all details are intimate details, because the
entire area is held safe from prying government eyes.'
People's intimate details must be kept safe from the prying
eyes of corporations as well."
3)What are smart TVs? Smart TVs are home entertainment systems
that are connected to the Internet. Some smart TVs now have
technology that can respond to human voices, which allows
consumers not only to speak basic commands but also to search
for content on the Internet or TV, rather than use a standard
remote control to find and select options. Manufacturers have
been producing smart TVs with built-in VR features since 2012.
The primary manufacturers of smart TVs sold in the United
States are Samsung Electronics, LG, Sony, Philips, and
Panasonic. According to Statistica.com, about 52 million
Smart TVs were sold worldwide in 2011, and that figure is
expected to reach 141 million in 2015.
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4)How does VR technology work? One well-known example of a
smart TV is Samsung's own SmartTV system. According to the
Samsung Electronics Official Global Blog, Samsung Tomorrow,
the SmartTV has two separate VR features:
a) A microphone embedded inside the TV set that responds to
commands to perform simple functions, such as changing the
channel and increasing the volume; and
b) A microphone inside the TV's remote control that can be
used to search for TV or Internet content (e.g., "Recommend
a good Sci-Fi movie.")
According to Samsung, voice data for the predetermined
commands is neither stored nor transmitted. However, the VR
search feature captures, records, stores and transmits spoken
words and conversations and transmits them to a third party
for analysis (in this case, Nuance Communications).
According to Samsung, to activate the VR feature, consumers
must:
a) Enable the feature when initially installing and setting
up the TV; and
b) Press a button on the remote control or on the TV screen
before speaking search terms out loud.
Nuance Communications provides the speech-recognition
technology behind most, if not all, smart TVs. Nuance is also
the speech-recognition engine behind Apple's Siri personal
assistant on iPhones, and the VR telematics systems of Audi,
Lexus, BMW and Mercedes cars. Nuance also plans to bring its
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technology to "smart" home appliances and devices, such as
refrigerators, coffee makers, and home alarm systems.
1)What are the privacy concerns with TV VR features? Once
considered a novelty, VR technology has become a standard
feature of many consumer electronics. From telephones that
capture and interpret our voices to enable hands-free texting
to televisions that allow users to change channels or search
for content via voice commands, speech recognition features
have evolved in ways that promote ease of use and safety for
consumers.
Critics, however, question the price of this progress. Recent
news reports have alleged that smart TVs with VR features can
unintentionally record and transmit sounds and private
conversations inside the room where the TV is located. ("It's
not just Samsung TVs - lots of other gadgets are spying on
you," Fusion, February 17, 2015; and "Be careful what you say
when your smart TV is on, Samsung warns customers," ABA
Journal, February 9, 2015.)
While some manufacturers have warnings in their user manuals and
privacy policies, many consumers are unaware that their TVs
can capture conversations inside the home and transmit them
back to the manufacturer or to a third-party service provider.
On February 24, 2015, the Electronic Privacy Information
Center (EPIC) filed a formal complaint to the Federal Trade
Commission (FTC) about Samsung Electronics SmartTVs.
According to the EPIC complaint, "Samsung routinely intercepts
and records the private communications of consumers in their
homes." In addition, while Samsung initially claimed that it
encrypted all voice communications during transmission, the
EPIC complaint pointed out that in February 2015 Samsung
admitted it did not encrypt all voice recordings it transmits
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over the Internet.
According to EPIC, "When the [VR] feature is enabled,
everything a user says in front of the Samsung SmartTV is
recorded and transmitted over the Internet to a third party
regardless of whether it is related to the provision of the
service." EPIC compiled numerous statements from Samsung
SmartTV customers who stated they had no idea the TVs were
recording conversations occurring in their homes.
Furthermore, EPIC argued that "privacy notices" do not
diminish the harm to American consumers. The EPIC complaint
claimed, therefore, that Samsung had surreptitiously recorded
private communications in the home and therefore violated
several federal privacy laws, including the Children's Online
Privacy Protection Act, The Cable Act, and the Electronic
Communications Privacy Act. EPIC asked the FTC to enjoin
Samsung and other companies that engage in similar practices.
That complaint is currently pending before the FTC.
The Center for Privacy and Technology at Georgetown Law School
and Consumer Reports analyzed the privacy policies and public
statements of Samsung and LG regarding their smart TVs and
concluded that "The privacy policies that cover smart TVs
aren't respecting [the privacy of your own home] the way they
should. The Samsung and LG policies say that you need to give
their TVs permission to collect voice data. That much is
clear. Everything else isn't." ("Samsung and LG smart TVs
share your voice data with a third party," Consumer Reports,
February 9, 2015.
www.consumerreports.org/cro/news/2015/02/who-s-the-third-party-
that-samsung-and-lg-smart-tvs-are-sharing-your-voice-data-with/
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index.htm)
2)Activation with the consumer's knowledge or consent . Current
law prohibits cable and satellite TV operators from recording
or transmitting conversations that occur in a subscriber's
home without notice and consent. This bill is similar to the
laws governing cable and satellite TV providers because it
also requires notice and consent before recording or
transmitting conversations that occur inside a consumer's
home.
In the case of Samsung's SmartTV, the company has argued that it
already obtains consent from consumers by requiring them to
activate the VR feature in the SmartTV and also agree to the
manufacturer's privacy policy (which explains the recording
and transmission of conversations) before using the VR
features.
However, current law does not require all smart TV manufacturers
to meet this opt-in notice and consent standard. In addition,
current law does not protect against secondary uses of voice
data collected by smart TVs. This bill requires consent
before the collection of voice data and also prohibits any
secondary uses of voice data.
3)Arguments in support . The Privacy Rights Clearinghouse states
in support of the bill, "AB 1116 will protect the privacy of
people in the sanctity of their homes?While manufacturers have
warnings tucked away in their privacy policies and service
agreements, consumers have been largely unaware that whatever
they say can be captured, recorded and transmitted to the
manufacturer or a third party service provider."
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4)Industry concerns . The Consumer Electronics Association (CEA)
submitted a letter of concern stating, "Companies need to be
transparent about the information they may collect, and inform
consumers about the data-collection capabilities and features
of their devices. Also, manufacturers should provide
protections for sensitive information and offer their
customers an easy means of turning off data-collection
features. The [consumer electronics] industry is working to
improve the transparency and consumer education regarding the
connected functions of consumer electronics devices. AB 1116
could have unintended consequences [that] inhibit the use of
accessibility features for people with disabilities like voice
recognition and gesture control. We are also concerned that
the definitions in the bill could be interpreted to extend
past the Committee's intended functions to limit other audio
and visual related capabilities."
5)Prior legislation . SB 1090 (Bowen), Chapter 731, Statutes of
2001, gave satellite TV subscribers the same privacy rights
afforded to cable TV subscribers under state law by
prohibiting satellite TV operators from recording or
transmitting conversations in a person's residence and
required satellite TV operators to get written or electronic
consent before collecting or sharing subscribers personal
information or television viewing habits.
6)Double referral . AB 1116 has been double-referred to the
Assembly Judiciary Committee where it will be heard if it
passes this committee.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 1116
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Privacy Rights Clearinghouse
Opposition
None received.
Analysis Prepared by:Jennie Bretschneider / P. & C.P. / (916)
319-2200