New Risks Posed by the “Internet of Things"

The Internet of Things, or “IoT” as it is now called, is here. It must be; it has a Wikipedia page.  It’s growing and evolving, and it’s supposed to change our lives in ways we can’t imagine. It’s the newest hot topic in the tech world. So what is the Internet of Things and what are we supposed to do about it?

In its simplest form, the Internet of Things is the digital communication network of physical objects. It encompasses the transfer of data between “smart” devices, such as computers, and “not-so-smart” devices and systems, such as appliances, cars, fitness equipment, and home security systems. The “not-so-smart” devices have sensing, logging and data storage capacity. The applications in these devices include microchips in everyday consumer products, and they also include digital sensing devices currently utilized in many industries, such as utilities, transportation, and medicine.

The IBM website describes the IoT as the central nervous system of the planet, which is developing intelligence and creating a smarter world.

Cisco Systems, Inc., lists out how the IoT is already being used in several industries.  

According to a March 2014 Pew Research Report, by 2025, the Internet will be connected to so many devices it will take on the character of the electric grid. It will be pervasive and unavoidable.

"Jane!  Stop This Crazy Thing!"

For every person who imagines his or her daily needs being met or even anticipated by gleeful but robotic housekeepers and other contraptions, there is another person who holds on tight to a dystopian vision of machines disobeying, revolting and attacking the humans who created them.

Such calamities were whimsically illustrated to those of us “of a certain age” by the opening credits of the popular 1960s cartoon classic, The Jetsons (the later version, not the earlier problem-free depiction), where George is cheerfully walking the family dog, Astro, on a treadmill in space. Cheerfulness turns to tragedy as George is repeatedly thrashed by the machine when Astro bolts to chase a cat. 

In reality, however, the evolution of the IoT will play out much differently and probably far less dramatically than our worst science fiction fears. Like the Y2K hysteria of the late 1990’s, many of the vocalized fears will dissipate in the light of the day. But like the World Wide Web, the overall impact on our lives, our economies and our work can’t even be imagined.

With the expansion of the Internet of Things, digital activity will continue to become cheaper and faster, and there will be economic consequences for many industries. In an MIT Technology Review article, author Antonio Regalado describes the anticipated network effect of the IoT. He explains that the network effect occurs “when each new user of a product makes its value higher. Think of the telephone a century ago. The greater the number of people who used Bell’s invention, the more valuable it became to all of them. The telephone became a platform for countless new businesses its inventor never imagined.”

Industry leaders are well aware of the opportunities created by the IoT. In fact, IoT developments by technology giants Google™, Apple® and Samsung® made news just this week. How it will ultimately affect the economy and our everyday lives is anyone’s guess. But it is clear that it will affect us drastically.

What Are the Legal Risks?

In a world where your car logs miles, speed, distance, location, your attention to driving (are you swerving the car while you change radio channels or talking to someone through the Bluetooth®?). Who owns that data? Do you? Does the car manufacturer? Does your insurance company have a right to ask you to give it access to that information? Does law enforcement? 

In a world where the pacemaker in your heart is connected to the Internet. We know we live in a world where viruses wreak havoc with our computers through malicious code downloaded through the Internet. Do we want to live in a world where software viruses can be downloaded to our pacemakers? 

The technology exists for both of those scenarios. The two most obvious risks of the IoT, therefore, involve privacy and security. The technology companies are already investigating ways to keep the information secure from viruses or hacking. But the legal profession has not yet addressed the legal risks involving privacy and security.  In an April, 14, 2014 Law360® article, Philip Blum and Bryan Goff of Bingham McCutchen LLP set out the current framework of laws that can be applied to the IoT. 'Internet Of Things' 101: Legal Concerns.  For example, they note that contractual issues of notice and consent have to be addressed in a situation where the user of the “not so smart” device is not even aware of what data is being collected and to what use that data is being put.

According to the article, no current federal law expressly governs privacy and security of personal information, but there are federal privacy laws that apply to specific circumstances, entity types or business sectors. In addition, the authors note that an increasing number of state laws will have implications for the IoT. They reference the following laws as being potentially pertinent: The Children’s Online Privacy Protection Act, HIPAA, the California Online Privacy Protection Act, various state security breach notification legislation and common-law claims for violations of privacy.

Law360 guest authors note that the FTC has already gotten involved in addressing the challenges posed specifically by the IoT. The FTC agreed to a consent order with a camera seller that had represented that its live video feed cameras were secure, but then failed to provide reasonable security. In the matter of TRENDnet Inc., FTC File No. 122 3090. Other federal agencies have begun investigating the issue of the IoT, including the U.S. Department of Energy, the U.S. Department of Transportation, the U.S. Food and Drug Administration and the Federal Communications Commission.

So What Happens Next?

The Internet of Things, like the World Wide Web before it, will change our world in ways we can’t imagine. Change is coming and we will need to be ready. Maybe computers themselves will help us?