Internet of Things companies need to ensure consumer privacy, warns US regulator
By Loek Essers
PCWorldJan 7, 2015 11:46 am PST
Internet connected devices are popping up like wildfire at the Consumer Electronics Show in Las Vegas this week. But while this new technology has the potential to provide enormous benefits for consumers, tech companies should put more effort into protecting consumer privacy and security, a top official at the U.S. Federal Trade Commission said.
This shows that the age of connected devices, commonly referred to as the Internet of Things (IoT), has truly arrived. As billions of devices get connected, benefits for users could be immense as the new tech could help to improve global health, modernize cities and spur economic growth—but at the same time the IoT has significant privacy and security implications, said FTC Chairwoman Edith Ramirez during a keynote speech at CES on Tuesday.
“Connected devices that provide increased convenience and improve health services are also collecting, transmitting, storing, and often sharing vast amounts of consumer data, some of it highly personal, thereby creating a number of privacy risks,” she said.
The constant collection of data from connected devices can lead to unexpected uses of consumer data that could have adverse consequences and undermine consumer trust, Ramirez said. “That trust is as important to the widespread consumer adoption of new IoT products and services as a network connection is to the functionality of an IoT device.”
What’s more, in the European Union, a group of privacy regulators issued an opinion on IoT in which they said consumers should remain in control of their personal data throughout the life of the product.
While the FTC can only enforce federal consumer protection laws and cannot create new regulation on its own, it can put pressure on U.S. law makers. Ramirez’ speech showed that the regulator is clearly interested in the new wave of connected devices coming on the market.
“In my mind, the question is not whether consumers should be given a say over unexpected uses of their data; rather, the question is how to provide simplified notice and choice,” Ramirez said.
“Some observers have argued that precisely because the IoT is in its early stages, we should wait to see how it evolves before addressing privacy and security issues. But I believe we have an important opportunity to ensure that new technologies with the potential to provide enormous benefits develop in a way that also protects consumer information,” she said, adding that companies that are investing billions of dollars in this growing industry should make appropriate investments in privacy and security.