CES: FTC's Ramirez Raises Warning Flags on IoT

Security, Choice Need To Part of New Connected-Data Regime

Federal Trade Commission chairwoman Edith Ramirez provided some words of caution about the "Internet of things" (IoT) that has been much in evidence at the Consumer Electronics Show In Las Vegas this week.

In a speech about privacy and policy considerations around IoT, she warned that in a world where there are expected to be 25 billion connected devices by the end of this year, there are significant privacy and security implications that need to be dealt with, primarily the ubiquity of data collection, its potential for unexpected use with adverse consequences, and the increased security risk of that sea of Big Data.

To protect both consumers and their business models, she advised companies to mitigate those risks by baking security into the process--"security by design"; minimize data collection by only collecting what is needed and disposing of that safely afterwards; and increase transparency about why and how data is being collected and provide meaningful notice and choice for "unexpected" uses, and not choice buried in lengthy privacy policies.

As a warning scenario, Ramirez turned to smart TV's. She said those may track "whether you watch the History Channel or reality television, but will your TV-viewing habits be shared with prospective employers or universities?," she asked. "Will they be shared with data brokers, who will put those nuggets together with information collected by your parking lot security gate, your heart monitor, and your smart phone? And will this information be used to paint a picture of you that you will not see but that others will–people who might make decisions about whether you are shown ads for organic food or junk food, where your call to customer service is routed, and what offers of credit and other products you receive."

She said those are hard questions, but ones that need to be thought about before "[continuing] down the path toward pervasive data collection."