The news: Texas Attorney General Ken Paxton filed lawsuits this week against Sony, Samsung, LG, Hisense, and TCL, stating that they secretly record users’ viewing activity through automated content recognition (ACR) software embedded in their connected TVs (CTVs), per Newsweek.

• The suits allege that these CTV makers’ systems can capture screenshots every 500 milliseconds and transmit data back to companies for ad targeting without clear user consent.
• Paxton stated that the software “puts users’ privacy and sensitive information, such as passwords, bank information, and other personal information, at risk” and called the practice “an uninvited, invisible digital invader.”

The five brands represent about 70% of the 40 million TVs sold in the US yearly, according to Visual Capitalist as cited by Newsweek.

Why it matters: The case lands as the CTV industry openly struggles with privacy, consent, and measurement.

• Measurement is the top addressability challenge in CTV—32.8% of digital ad professionals cite it as a roadblock, per ID5.
• Capturing and communicating user consent—directly implicated in the Texas lawsuits—is also a concern, flagged by 19% of respondents.

Those challenges explain why ACR became so central. It underpins targeting, attribution, and frequency control in a fragmented streaming environment.

Zooming out: Paxton’s move echoes broader Texas-led technology enforcement—Meta’s $1.4 billion biometric privacy fine and Google’s $1.3 billion data collection penalty point to rising state and federal willingness to test privacy limits.

If Texas wins, TV makers could face stricter limits on ACR data collection, forcing them to pause or redesign how they track viewing behavior across apps.

Tighter restrictions on data sharing will cut into lucrative ad revenues for brands such as LG, Samsung, and Hisense that rely on ACR-driven targeting and measurement.

What this means for advertisers: The cases could establish new disclosure and consent standards for smart devices. For advertisers, it could upend existing data pipelines that rely on opaque tracking and may face state-level scrutiny.

Brands that emphasize transparency and user control—with explicit front-screen consent controls and opt-in mechanisms—will be better positioned to maintain trust as regulators tighten oversight.