04/04/2001
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"The charges against TiVo are serious and certainly raise questions as to whether they violate the prohibition in section 5 of the Federal Trade Commission Act against 'unfair or deceptive practices,'" says the letter, written March 28 to FTC chairman Robert Pitofsky by Reps. John Dingell (D-Mich.), Edolphus Towns (D-NY) and Edward Markey (D-Mass.). The letter goes on to note that the Privacy Foundation report claims TiVo links viewer preference data with the serial number of their home box, and that, "if true, one must ask whether TiVo's mischaracterization of the term 'anonymous' is purposeful and intended to deceive consumers."
The letter also argues that TiVo, again citing the Privacy Foundation report, only severs the serial number from the viewing data by choice, and that it could keep the data paired at any time without much difficulty. The Congressmen conclude the letter by asking the FTC to report, by April 25, on whether or not TiVo's policies do in fact run afoul of the law. A spokesperson for the FTC could not immediately be reached to confirm that the commission had received the letter.
A spokesperson for TiVo declined to comment on the letter to the FTC, saying that the company would rather respond to the commission first before discussing the letter publicly. However, she did note that the company stands by its restatement of its privacy policy, issued on March 26 in response to the Privacy Foundation report.
"We are very proud of our privacy record," TiVo chief privacy officer Matt Zinn said in that restatement. "TiVo has set very high standards for the entire PVR industry, we pledge to continue following those ideals, and we encourage our partners and competitors to do the same."
The report, produced with the University of Denver Privacy Center, charged TiVo with not protecting customer data sufficiently. It took particular issue with the depth of data TiVo records, logging things as small as the time and date of a channel change, and also with inconsistencies between the manuals that ship with TiVo hardware and the privacy policy enumerated on TiVo's Web site. The report had seven recommendations for TiVo to improve its privacy policy, including asking subscriber permission to log data, giving users privacy control options in their on-screen interface and disclosing that the data logs can track remote control usage.
On March 18, TiVo was profiled on 60 Minutes, in a piece which extolled the device's virtues and quoted analysts saying it was going to have an enormous impact on home entertainment. While the company's stock shot up 26 percent the next day (after tickling its all-time low the previous Friday), it didn't hold on to any sort of bounce, and has been kept firmly in check by negative press about the privacy report. TiVo closed Tuesday at 4 11/32, down 21/32. Deutsche Banc Alex. Brown recently downgraded the stock to market underperform, and the company reported $19 million in losses for the month of January alone.
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