February 3, 2014

Putting Privacy Concerns About the Internet of Things in Perspective

Adam Thierer

Former Senior Research Fellow
Summary

I've written here and elsewhere about the growing privacy and security concerns surrounding the rise of the "Internet of Things" (IoT) era. Many privacy advocates are already decrying the potential for massive security threats and privacy violations in a world of always-on, always-sensing devices. I've admitted that there are some valid reasons for concern, even though I've also argued that most of us will likely quickly adapt to this new era and we will also find practical solutions to many of the problems that arise.

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I've written here and elsewhere about the growing privacy and security concerns surrounding the rise of the "Internet of Things" (IoT) era. Many privacy advocates are already decrying the potential for massive security threats and privacy violations in a world of always-on, always-sensing devices. I've admitted that there are some valid reasons for concern, even though I've also argued that most of us will likely quickly adapt to this new era and we will also find practical solutions to many of the problems that arise.

But it may be the case that some of the problems we fear today never come about. 

A recent report by Frank E. Gillett and others for Forrester Research, "The Internet Of Things Comes Home, Bit By Bit," identifies a few reasons why. First, it is not a foregone conclusion that everything will be connected or have an active sensor. The Forrester report notes that "[IoT] adoption remains nascent, and consumers who are not interested still outnumber those who are." The report, which surveyed both U.S. and European consumer attitudes about new technologies, found that a clear majority of consumers on both sides of the Atlantic were not interested in remote home monitoring or remote appliance control. Although a larger number of U.S. and European consumers were interested in home energy and security solutions, those individuals still did not outnumber those who were not at all interested in adopting such technologies.

Of course, attitudes will likely evolve somewhat over time and more consumers will come to adopt some of these technologies. But others will never come around to the idea of a fully automated home or life. They just won't demand it or, in some cases, their concerns about privacy and security will drive them away. Many IoT technologies will likely be a complete bust for this reason. As others have already half-jokingly pointed out, do we really need interconnected toilets and toasters? While there may be a compelling use case for smart thermostats and refrigerators, the same might not be true for many other devices in our lives. "Consumers don’t want a smart home," the Forrester report notes, "they want a smart product to solve a specific problem." And those specific problems consumers are looking to solve will likely be fewer in number than many IoT enthusiasts suggest. Moreover, Forrester notes, other adoption barriers remain in the form of high cost, device complexity, installation hassles and lack of retail outlets with specialized knowledge to sell some of these technologies and help consumers use or fix them.

The Forrester report identifies another reason that we should put privacy and security concerns in perspective: Not nearly as much data is likely to be collected or shared as some fear currently. The report notes that "privacy concerns will inhibit data economy approaches," and elaborates as follows:

The connected home is a potential treasure trove of data for third parties such as home and health insurance providers. However, companies will consider data about consumers in their homes a “third rail,” wherein revenue potential does not come close to offsetting the risk of negative reaction from customers. Behavioral data will remain locked within individual solutions, and companies will apply analytics exclusively in the service of the customer, not third parties.

I think that's probably right.

Most IoT vendors will jealously guard the data they collect for sound business reasons, namely, (1) they want to capture the value of that data themselves; and (2) they want to avoid the reputation hit they would take if others got their hands on it and misused it. More importantly, they'll want to avoid the legal hit to their bottom line that could arrive in the form of expensive class-action lawsuits or Federal Trade Commission investigations that would follow data security lapses or privacy screw-ups.

So, there are good reasons to take a deep breath and realize that most of the worst-case scenarios about the Internet of Things won't come about. Moreover, exactly because privacy and security advocates are already raising concerns and exerting so much pressure, there is a heightened concern among IoT developers and a clear baseline expectation that a certain amount of privacy and security will need to be "baked in" from the start to avoid costly mistakes.

Of course, there's no way to achieve perfect safety, security or privacy in the Internet of Things era, just as there was no way to achieve perfect safety, security or privacy for the broader Internet. You cannot have the most open, accessible and interactive "network of networks" that humanity has ever known without also having some serious privacy, security and safety issues creep up on occasion. We'll always face new challenges and will need to constantly work to improve data practices accordingly.

Nonetheless, it remains important to put things in perspective and realize that the dystopian tales of doom regarding life in the Internet of Things era are likely to end up being just another fleeting technopanic moment.