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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

FTC Focuses on ‘Internet of Things’

Posted in Data Security, Emerging Technologies, Federal Trade Commission, United States

The Federal Trade Commission’s announcement that it reached a settlement with a home security camera maker indicates a new focus on the privacy implications of everyday devices that are connected to the Internet.

On Wednesday, the FTC announced a settlement with TRENDnet, which sells Internet-connected home cameras for security, baby monitoring, and other purposes. The FTC alleges that the company marketed the devices as “secure,” even though anyone with the cameras’ Internet addresses could view the videos. The FTC alleges that in January 2012, a hacker exploited this vulnerability and publicly posted hundreds of the live feeds on the Internet.

The settlement requires TRENDnet to accurately represent its cameras’ security measures, improve the products’ security protections, notify customers about the security problems, and undergo third-party privacy assessments every two years for the next 20 years.

The TRENDnet settlement demonstrates that the FTC will carefully examine whether everyday devices, such as cameras, televisions, and home appliances, provide adequate privacy protections when they are connected to the Internet. The topic is known as the “Internet of Things.”

“The Internet of Things holds great promise for innovative consumer products and services. But consumer privacy and security must remain a priority as companies develop more devices that connect to the Internet,” FTC Chairwoman Edith Ramirez said in the announcement of the FTC settlement.

On Nov. 19, the FTC will hold a workshop on the Internet of Things. In advance of the workshop, 29 individuals, groups, and companies submitted comments to the FTC about potential regulations. Among the comments:

  • The Consumer Electronics Association stated that its member manufacturers and service providers are “committed to ensuring that consumer privacy is adequately protected in the connected world of tomorrow in part because of their inherent interest in protecting their brand — a company’s most valuable asset — and the goodwill associated with it.”
  • The Center for Digital Democracy wrote that because the Internet of Things “places consumer privacy at greater risk than ever before,” new safeguards are necessary.
  • AT&T wrote that industry-led efforts “will continue to be the most effective way to protect privacy and security in the context of the ‘Internet of Things.’”
  • The Electronic Privacy Information Center wrote that “the ubiquity of connected devices would enable to collection of data about sensitive behavior patterns, which could be used in unauthorized ways or by unauthorized individuals.”