Texas Attorney General Ken Paxton has filed lawsuits against the five largest smart TV manufacturers, accusing them of illegal surveillance of users. Sony, Samsung, LG, Hisense, and TCL have come under fire from Texas authorities for using automatic content recognition technology without the consent of device owners.
Companies have embedded ACR (Automated Content Recognition) software into their TVs, which takes screenshots every 500 milliseconds. This means your TV is photographing everything happening on the screen twice a second — from Netflix series to banking apps that you open through your gaming console.
Digital spy in the living room
Paxton called the ACR technology an "uninvited invisible digital captor." The system tracks not only streaming services but also cable television, gaming consoles, and any devices connected via HDMI. The collected data is then sold to advertisers for targeted advertising.
"Companies, especially those linked to the Communist Party of China, have no right to unlawfully record the devices of Americans in their own homes," the Attorney General stated. Chinese manufacturers Hisense and TCL are of particular concern to authorities, as they may be compelled to transfer data to the Chinese government under China's National Security Law.
The first judicial injunction in history
On December 17, Paxton secured an unprecedented temporary restraining order against Hisense. This is the first judicial injunction in U.S. history blocking data collection by a smart TV manufacturer. Companies are now prohibited from collecting, using, selling, and transferring ACR data from Texas residents until the legal proceedings are concluded.
The ACR technology can capture critically important information — passwords, banking details, personal correspondence. Manufacturers are accused of intentionally complicating the opt-out process and "burying" explanations in legal terminology that most users do not read.
Billion-dollar fines on the horizon
Texas seeks restitution of up to $10,000 for each violation of the Deceptive Trade Practices Act. For cases involving individuals over 65, the penalty increases to $250,000. With such amounts, potential payouts could reach billions of dollars.
Most of the accused companies declined to comment on the situation. LG Electronics USA officially stated that it does not comment on ongoing lawsuits. Sony, Samsung, Hisense, and TCL also did not respond to media inquiries.
Not the first scandal in the industry
The privacy violation issue in the smart TV industry has precedents. In 2017, Vizio paid $2.2 million to settle allegations of collecting data from 11 million users without their consent.
Lawsuits were filed in various district courts in Texas on December 15, 2025. The case may stretch on for months or years, but its outcome could drastically change approaches to privacy in the television industry. Considering that around 40 million TVs are sold annually, the potential impact of the court's decision extends far beyond Texas.
The prosecution is also seeking court orders to prohibit the collection, transfer, and sale of ACR data until the proceedings are complete. If successful, this could immediately impact millions of smart TV owners in the state.
AI Opinion
From a technological trends perspective, the Texas prosecutor's case reflects a broader problem of monetizing user data in the era of the Internet of Things (IoT). ACR technology represents just the tip of the iceberg — modern smart devices collect terabytes of behavioral information through microphones, cameras, and motion sensors. TV manufacturers have effectively turned their devices into data collection platforms, where selling hardware becomes secondary to revenues from advertising technologies.
The economic model of the industry could change dramatically if the lawsuits succeed. Companies will either have to raise the price of TVs to compensate for lost revenue from data or develop entirely new business models based on transparent user consent. It will be interesting to see how this affects the competitiveness of Asian brands against American and European manufacturers amid growing demands for digital sovereignty.
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