Millions of smart TVs sitting in living rooms across Australia and around the world may be doing far more than streaming movies—raising fresh concerns about surveillance, data harvesting, and the rise of so-called “Web OS economies.”

LG Electronics is under renewed scrutiny after reports revealed its WebOS platform is being used to collect and monetise detailed data on users’ daily viewing habits. At the same time, the company has expanded its own in-TV advertising ecosystem—effectively turning screens into both tracking tools and marketing platforms.

But the controversy goes deeper.

Investigations suggest that some smart TVs may now be quietly participating in residential proxy networks—systems that can use household devices to crawl the internet, sometimes under the justification of “AI training purposes.” Critics warn this blurs the line between consumer electronics and distributed data infrastructure.

A recent report by Lowpass found that data collection on TV platforms is not new. Major ecosystems—including Amazon Fire TV and Google TV—have long gathered usage data when users stream content. However, regulators and platform operators are now moving to crack down on more aggressive practices.

One such case involves a network known as IPIDEA, which allegedly accessed millions of smart TVs through proxy bot systems. Security experts say the network was rented by hacking groups linked to China, North Korea, Iran and Russia, potentially exposing home networks to exploitation. While IPIDEA has reportedly been blocked on Fire TV and Google TV devices—including brands like Sony and TCL—it remains unclear whether similar activity persists on LG’s WebOS or Samsung’s Tizen platforms.

Meanwhile, a newer player—Bright Data—has emerged, openly advertising a residential proxy service that uses consumer devices, including smart TVs, to scrape public web data. According to reports, this can include extracting audio and video content, which is then routed to cloud servers for processing.

Bright Data has listed both LG WebOS and Samsung Tizen among its supported environments, raising alarm bells among privacy advocates. With more than 200 apps available on WebOS alone, the potential surface area for data collection is vast.

The company insists it does not track users. “We don’t do any kind of tracking,” Bright Data representatives have claimed. Yet past statements from its leadership paint a different picture. Two years ago, Chief Product Officer Ariel Shulman described operations that “work silently in the background,” with users unaware their devices were being utilised.

Investigators are now openly skeptical. Beyond privacy concerns, questions are mounting about performance impacts, with reports that proxy activity can run even when users are not actively using specific apps—potentially contributing to the well-documented slowdown of smart TVs over time.

At the heart of the issue is a broader shift in how smart TV ecosystems operate.

Manufacturers are increasingly bundling Automatic Content Recognition (ACR) technology, targeted advertising, and data-sharing frameworks directly into operating systems before devices even reach consumers. In exchange, users are often enticed with lower subscription costs or reduced advertising—if they agree to terms that allow their devices to be used for data collection or network activity.

In one example, users accessing “Petflix” content were shown a message stating that, in return for fewer ads, their device could be used to “download public web data,” with their IP address shared for “approved business-related use cases.”

Privacy experts argue that such disclosures are often buried in fine print or presented in ways that obscure the true scale of participation.

“Calling it ‘public data’ doesn’t eliminate the risks,” one analyst noted. “You’re still turning private household devices into nodes in a commercial data network.”

Major tech companies appear to be drawing a line. Amazon, Google and Roku have recently restricted the use of Bright Data and similar proxy services within their app ecosystems. Yet gaps remain—particularly on platforms like LG WebOS and Samsung Tizen, where enforcement and transparency are less clear.

The implications are significant.

With each smart TV assigned its own IP address, these devices are increasingly being used to bypass detection systems designed to block data center traffic. That makes them attractive not just for commercial data scraping, but potentially for more malicious activity.

As manufacturers push deeper into advertising and data monetisation, critics warn that consumers are being left in the dark about how their devices are truly being used.

What was once a simple screen for entertainment is fast becoming something else entirely: a persistent, always-on data collection endpoint embedded in the home.

And for many users, the question is no longer whether their TV is collecting data—but how much, and for whom.