GUEST BLOG: Can the FTC control the privacy of the IoT (Internet of Things)?

03 October 2016 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

My Guest Blogger Eric Levy is a senior attorney in Gardere’s Trial Practice Group who focuses on cyber security, PCI compliance, PII, eCommerce, and related complex litigation.

Apparently IoT is leading the FTC (Federal Trade Commission), the government watchdog of privacy, one step closer to broadening the scope of what it believes falls within the definition of “personally identifiable information” or PII.

As the Keynote Speaker at the Technology Policy Institute luncheon in Aspen, Colorado on September 20, 2016, FTC Chairwoman Edith Ramirez commented on the need for companies to honor the rights of individual consumers to retain control over their own PII in a digital world where the proliferation of IoT devices shows no signs of slowing down.

“In a world of connected devices, consumers often do not know which companies are doing what,” Ramirez explained, pointing out that a mobile device like a phone or tablet will involve a multitude of stakeholders (the manufacturer of the device, the creator of the OS, the carrier providing the connection and each app developer). Given this vast number of corporate actors, Ramirez remarked that resulting customer confusion could incentivize companies to pass the blame for the sale, loss or theft of PII onto another technology provider in the chain, the result being that consumers never find out how their data was appropriated or used.

In spite of this rather bleak outlook, Ramirez dismissed the idea that this new level of complexity has rendered traditional methods of obtaining consumer consent obsolete. She expanded on her position by noting that the FTC has already started taking steps to broaden the working definition of PII to include any data that can “be reasonably linked to a particular person, computer, or device.” She included as examples things like persistent identifiers, such as device identifiers, MAC addresses, static IP addresses, and retail loyalty card numbers.

Ramirez also said that device manufacturers and other consumer-facing companies should improve customers’ “ability to manage and express their privacy preferences” through things like “set-up wizards and settings menus … as well as dashboards where consumers can revisit and modify their choices.”

While it is too soon to say how far the FTC will push this expansion of consumer control and options, it seems likely that, as the definition of PII broadens, so too will the number of FTC enforcement actions. Be warned!

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