The Internet of Things and Its Effect on Privacy and Security

With the prevalence of smartphones, nearly everyone can tap into the vast world of the Internet of Things (IoT). This includes high-tech ways to access and control popular devices, such as TVs, cars, and home security systems, all with the help of a Wi-Fi connection. It’s estimated that by 2020, there will be 24 billion IoT devices in use.

The devices typically utilize simple technology that is susceptible to security breaches. Due to the amount of private data handled by these devices—ranging from financial information to search histories—the possibility of data loss is a genuine concern. In the following, we discuss some of the major risks and benefits of IoT and how data can be effectively protected.

Benefits of the IoT

smartphoneThe major benefit of the IoT is that it has the potential to make our everyday lives much easier. For example, having a so-called smart home is not only a novel topic of conversation, but it can help you to stay comfortable inside your home, foster peace of mind thanks to heightened security, as well as save on energy costs. One of the most recent examples of smart home technology that has come on to the market is the Google-purchased Nest thermostat system. Nest allows users to pair their home thermostat with their smartphone and to integrates the thermostat into the home’s Wi-Fi ecosystem.

Connected cars have also begun to feature more IoT technology, and consumers have become increasingly intrigued by how technology can enhance the overall driving experience. In certain cases, cars equipped with IoT technology can intelligently connect to city infrastructure, providing sophisticated navigation that goes well beyond the GPS technology to which we’ve become accustomed.

Threats to Security and Privacy

Despite all the amazing things that have resulted from IoT technology, there are still some major privacy and security concerns. The more connected our society becomes in every aspect of life, the more opportunity there is for hackers to access sensitive data and inflict harm. For example, in 2015 hackers caused a widespread power outage in Ukraine by breaching a power grid. This is just one instance of how access to certain data can wreak major havoc.

Aside from acts that can cause inconvenience or damage to society as a whole, individual privacy is also a real concern. Many consumers are worried about their personal information being accessed, yet many of them aren’t sure where to draw the line between convenience and vulnerability to hackers. Sending personal information over the Internet is risky in even the best of circumstances, and when it gets into the wrong hands, it can result in identity theft, which is a problem that has been magnified since the IoT has taken over.

Voice Recognition

microphoneIoT technology includes devices driven by voice recognition, which can present several security and privacy concerns. Using voice recognition requires that the waiting device interpret what is said by the user, determine who is speaking, and conclude what specific response the user is seeking. Voice-recognition devices such as Amazon’s Echo are in an always-on state and pick up sounds in the foreground and background by design. When a person asks a voice recognition device to perform a task, detailed information is learned about the user. The devices can collect, store, and use this information for marketing and other purposes.

Additionally, the information gleaned from voice recognition devices is sent to a remote server, and it is unclear what happens to this data once the user speaks a query. What many consumers may not know is that these devices are sometimes so sophisticated that they can not only pick up the actual voice query, but they can also pick up background conversations and even the sound of other tools or devices that are being used in close proximity. Background noise and conversations are sometimes analyzed and used for a variety of purposes, including targeted marketing. For consumers, this type of marketing may be viewed as intrusive.

Legal Implications

In terms of the amount of sensitive data collected by IoT devices, the Federal Trade Commission (FTC) estimates that just 10,000 households can reasonably generate 150 unique and sensitive data points on a daily basis. The sheer amount of data handled by these devices is staggering and opens up users to some level of vulnerability to hackers.

All IoT devices that gather any sort of personal information are bound by a terms of service or terms of use agreement that explains how sensitive information is collected, as well as how it will or will not be used. The problem is, many people fail to read through these disclosures and terms. The FTC indicated that this failure to read the fine print can have real-life consequences, such as higher insurance rates based on information collected from vehicles using IoT technology or the denial of life insurance due to information collected from fitness trackers. Without a comprehensive understanding of how information from IoT devices can be used, there could be many unfortunate consequences.

While consumers are understandably fascinated by new technology, they should still be vigilant about protecting their personal information and understanding the risks. By being properly informed, consumers can reduce the likelihood of becoming victims of identity theft while reaping all the benefits of using IoT devices.