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FTC Chairwoman Raises Concerns Over the Internet of Things

By Casey C. Sullivan, Esq. on January 20, 2016 | Last updated on March 21, 2019

When the consumer electronics industry gathered for the International Consumer Electronics Show in Vegas two weeks ago, the mood was generally celebratory and the Internet of Things -- that interconnected network of web-enabled gadgets -- was at the center of much of it. Smart devices were everywhere, from watches to fridges to burglar alarms. Commentators on Forbes declared that CES 2016 was the year when the Internet of Things went "from smart to wicked intelligent."

But not everyone was on the bandwagon. Federal Trade Commission Chairwoman Edith Ramirez was on hand to pour some much needed rain on the IoT parade, warning that until the industry addressed privacy concerns, it would still face major challenges.

You Can't Spell "Orwellian Dystopia" Without IoT

Ramirez's comments echoed familiar concerns about the Internet of Things and consumer privacy. While at CES 2016, Ramirez told The Washington Post that "it's really important for companies to know that, in order to be successful, we think consumers need to have confidence in the products they're purchasing," which means having confidence in "what's happening to their personal information."

Speaking at the event, Ramirez cautioned that "consumers are going to be slow to take up these products if issues of privacy and security are of a concern."

And privacy and security are a concern when it comes to the Internet of Things. On the security front, the more web-connected devices there are, the more things to hack there are, a fact that many IoT devices haven't fully accepted yet. There've been, for example, hacks into Internet-connected cars, children's toys, and even medical devices.

When it comes to privacy, the main concern is data: what are IoT devices collecting, who has access to it, and how can it be used? And believe us, that information can be used in unexpected, interesting, and legally significant ways. Take, for example, the man whose fitness monitor pretty distinctively showed his break up:

Which Way Forward?

Ramirez didn't plan a way forward for the IoT and consumer confidence and security at CES. But just a few days later, the FTC hosted its first PrivacyCon, a "first-of its-kind conference... bringing together leading experts to present original research on privacy and security."

In her opening comments to PrivacyCon, Ramirez highlighted the FTC's approach to consumer privacy: advise companies on best practices to ensure that data use benefits consumers and take enforcement actions against those who use data unfairly or deceptively.

It's a bit of an ad-hoc approach, but as Ramirez says, "we are not just scratching the surface of what is to come."

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