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FTC Worried About Consumer Privacy As Internet Of Things Becomes Popular

By Paul Liu
Monday, January 26th, 2015

The popularity of Internet Of Things (IOT) enabled devices is growing with each passing month. As per reliable estimates, there were 200 million smart devices (devices capable of talking to one another and/or connecting to the internet) by the end of 2013 and that figure is likely to leapfrog as much as four times in the next five years. While entrepreneurs and consumers are excited by the possibilities offered by the new technology, a lot of privacy advocates and activists are worried about the privacy aspects of using IOT enabled devices at homes. This issue was also highlighted by Federal Trade Commission (FTC) chief Edith Ramirez in her keynote address during the latest edition of Consumer Electronics Show (CES) which was held from 6-9 January in Las Vegas.

Speaking at the event, Ramirez praised the technology by saying that IOT can indeed help in improving health, infrastructure and economic growth. However, she also cautioned that while connected devices provide increased convenience, they are also collecting, storing, sharing and transmitting a huge amount of personal data which could result in a number of privacy risks. Stressing the need for safeguarding privacy, she said that the industry has a long way to go before people would be comfortable with sharing their intimate details with devices that could automatically talk to other devices or connect to the internet.

While acknowledging that most aspects of our lives would be observed and stored in a digital format in the next few years, Ramirez noted that it would be markedly different from how we capture and store data today. The Smartphone revolution has made it possible to capture, store and send photos and other type of data but in future our cars would automatically know where we are going, whom we are travelling with as well as our daily schedules while our microwaves and refrigerators would know all about our monthly bills and eating habits. By introducing sensors into devices that we use in personal spaces, companies would be able to analyze our behavior and shopping habits and perform all types of analysis on our intimate data.

FTC has been trying to raise consumer awareness regarding the privacy and security pitfalls of using IOT enabled gadgets, wearable technologies and smart devices for quite some time. While the agency doesn’t have the authority to impose new legislations regarding the use of smart devices, it can ensure that manufacturers of smart devices comply with existing regulations.

FTC is not the only organization that has raised privacy concerns regarding the use of IOT enabled devices. Government official and security experts have urged the manufacturers and developers to be fully transparent about their data collection and sharing practices. Even in Europe, a bunch of privacy regulators are proposing that consumers should retain control of their personal data even when it is being collected and used by an IOT enabled device. As Ramirez said during the event, customer trust is an important factor that needs to be addressed before the technology gains widespread acceptance. Until customers are absolutely sure about how their data is being collected and handled, only tech-savvy people are going to migrate to the technology.