BILL ANALYSIS Ó
AB 1116
Page 1
Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 1116
(Committee on Privacy and Consumer Protection) - As Amended
April 13, 2015
As Proposed to be Amended
SUBJECT: CONNECTED TELEVISIONS
KEY ISSUES:
1)SHOULD A TELEVISION THAT HAS THE CAPABILITY OF RECORDING
HOUSEHOLD CONVERSATONS BE PROHIBITED FROM RECORDING, STORING,
OR TRANSMITTING SPOKEN WORDS UNLESS THE PURCHASER OF THE
DEVICE CHOOSES TO ENABLE THAT CAPABILITY AND CONSENTS TO HAVE
HIS OR HER SPEECH RECORDED?
2)SHOULD A CONSUMER WHOSE HOUSEHOLD CONVERSATONS ARE
SURREPTIOUSLY RECORDED BY A TELEVISION WITHOUT HIS OR HER
KNOWLEDGE OR CONSENT HAVE NO CIVIL REMEDY FOR THE VIOLATION OF
HIS OR HER PRIVACY?
SYNOPSIS
Smart TVs are home entertainment systems that are connected to
the Internet. Some smart TVs now have technology that can
AB 1116
Page 2
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. 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. Current law prohibits cable and satellite TV
operators from recording or transmitting conversations that
occur in a subscriber's home without notice and consent.
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 notice and
consent before recording or transmitting any conversations that
occur inside a consumer's home. This bill also requires consent
before the collection of voice data and also prohibits any
secondary uses of voice data. The bill does not specify that a
manufacturer is liable for civil damages as a result of
violating the requirements of the bill. Nevertheless, the bill
states that "This chapter shall not be deemed to create a
private right of action." This sentence is not only
unnecessary, but could also be misleading and possibly
counterproductive to privacy interests. In order to clarify
that the bill neither creates a new cause of action, nor
eliminates an existing cause of action, a clarifying amendment
is suggested. The author also proposes a number of clarifying
amendments that were debated and approved when this bill was
heard and passed unanimously by the Assembly Privacy and
Consumer Protection Committee. This bill has no opposition and
is supported by Privacy Rights Clearinghouse.
SUMMARY: Limits the ability of Internet-connected televisions,
commonly known as "smart TVs," to record and transmit spoken
words for a purpose that is not essential to the function of the
television. Specifically, this bill:
AB 1116
Page 3
1)Prohibits televisions (TVs) with voice-recognition (VR)
features, also known as "smart TVs," 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 uses.
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.
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 the 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
AB 1116
Page 4
penalty of up to $2,500 per violation, or both.
8)Specifies that there is no private right of action for
violation of these provisions.
9)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 Sections 630-638.)
AB 1116
Page 5
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. (Penal Code Section 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. (Penal
Code Section 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. (Penal
Code Section 637.5(i).)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: According to Assemblymember Gatto, the lead author of
this bill, "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."
AB 1116
Page 6
(Too) 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.
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 microphone embedded inside the TV set that responds to
commands to perform simple functions, such as changing the
channel and increasing the volume; and
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).
AB 1116
Page 7
According to Samsung, to activate the VR feature, consumers
must:
Enable the feature when initially installing and setting up
the TV; and
Press a button on the remote control or on the TV screen
before speaking search terms out loud.
Privacy concerns with smart TVs. 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
AB 1116
Page 8
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 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,
AB 1116
Page 9
2015.)
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.
Effect of bill's disclaimer that there is no "private right of
action" for violation of this proposed law. The bill does not
specify that a manufacturer is liable for civil damages as a
result of violating the provisions of the bill. Nevertheless,
the bill states that "This chapter shall not be deemed to create
a private right of action." This sentence is not only
unnecessary, but could possibly be misleading and
counterproductive to privacy interests. It is unnecessary
because, as the court noted in Doe v. Albany Unified School
District, 2011 Cal. LEXIS 2555 (Cal. Mar. 1, 2011), a violation
of a statute, even one that is mandatory, does not necessarily
give rise to a private right of action. Quoting prior case law,
the court noted that "whether a party has a right to sue depends
on whether the Legislature has 'manifested an intent to create
such a private cause of action' under the statute." The court
AB 1116
Page 10
added that such intent, if any, is revealed through the language
and legislative history of the statute. (Doe v. Albany Unified
School District, supra, quoting Moradi-Shalal v. Firemen's Fund
Insurance Companies (1988) 46 Cal. 3d 287, 305.)
As for the statute amended by this bill, neither the language of
the statute nor its legislative history reveals any intent to
create a private right of action, expressly or otherwise. The
language of the bill does not provide that a person whose
privacy is violated has the right to collect damages from a
manufacturer who violates the provisions of this bill.
Therefore, it seems redundant and unnecessary to say that the
statute does not intend to create a private right of action.
Because the bill does not, in fact, create one.
This provision is misleading and possibly counterproductive to
the protection of consumer rights and privacy because it implies
that a party could not rely on the violation of this statute in
a civil action. It could be relevant in a negligence per se
claim to show a breach of duty by the manufacturer of a TV, or
it could be relevant in a civil action for common law invasion
of privacy. It is also important to note that although a
consumer would have a civil remedy when a cable operator
eavesdropped on his or her home (Penal Code Section 637.5(i),
providing that "Any aggrieved person may commence a civil action
for damages for invasion of privacy against any satellite or
cable television corporation, service provider, or person that
leases a channel or channels on a satellite or cable television
system that violates the provisions of this section.") the
Committee may question why satellite and cable television
operators are made expressly liable in a civil action for
eavesdropping on a consumer, while television manufacturers are
relieved from civil liability to individual victims under the
provisions of this bill.
Arguments in support: Privacy Rights Clearinghouse states in
support of the bill:
AB 1116
Page 11
AB 1116 will protect the privacy of people in the sanctity
of their homes by restricting the sale of televisions in
California that can record and transmit sounds or
conversations from inside a person's home back to the
manufacturer or a third party when the TV's voice
recognition technology is not enabled by the consumer. . .
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. AB 1116 protects California
consumers by effectively requiring manufacturers to ensure
that a TV's voice recognition feature cannot be remotely
enabled by the manufacturer or the manufacturer's third
party service provider without the consumer's knowledge and
without any action by the consumer to enable the voice
recognition feature.
Clarifying amendments. In order to clarify that the bill
neither creates a new private right of action, nor eliminates an
existing private right of action, the following clarifying
amendments are suggested:
On page 4, at line 24, after the word "action" insert the
following: ", or limit any existing private right of
action"
In addition, the author proposes the following clarifying
amendments that were discussed and approved by the Assembly
Privacy and Consumer Protection Committee when it heard this
bill on April 21, 2015, along with the author's explanation of
the amendments.
Page 3, lines 21-22, strike ", including, but not limited
AB 1116
Page 12
to, an interactive on screen dialog"
Page 3, line 34, strike ", including, but not limited to, a
button or voice command"
Page 3, line 37, strike ", including, but not limited to, a
signal light"
Author's explanation: "The above three amendments are a result
of discussions with an attorney from the Consumer Electronics
Association. . . .[T]he attorney indicated that though that may
be the case, there was a fear that mentioning specific things
(like a signal light to indicate the TV is collecting sounds)
could lead to California only TVs, which is not at all our
intent."
Page 3, between lines 37 and 38 insert: "(d) This section
shall not apply to those products and services provided by
companies covered under Section 637.5 of the Penal Code."
Author's explanation: "This amendment is at the request of the
Cable/Satellite folks who pointed out to us that they are
already subject to privacy provisions in Penal Code 637.5."
Page 4, line 5, after "tablet," insert: "video game console"
Author's explanation: "This amendment came from several sources,
including the Republican policy consultant who wanted to make
sure that a PlayStation or X-Box would not be defined as a TV,
as one could argue that some of these gaming systems receive TV
signals used to broadcast signals. As we have also carved out
personal computers, tablets, and cell phones (because this bill
AB 1116
Page 13
is narrowly about the TVs themselves), it just made sense to
carve out video game consoles."
Add Assemblymember Dababneh as a Committee co-author.
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 requiring satellite TV
operators to get written or electronic consent before collecting
or sharing subscribers personal information or television
viewing habits.
Prior votes on this bill. AB 1116 passed the Assembly Privacy
and Consumer Protection Committee on April 21, 2015 by a vote of
11-0.
REGISTERED SUPPORT / OPPOSITION:
Support
Privacy Rights Clearinghouse
Opposition
AB 1116
Page 14
None on file
Analysis Prepared by:Alison Merrilees / JUD. / (916) 319-2334