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FTC Officials Worried About Downside of Internet of Things

Connected devices are great, but you also need to think about all the data being collected and stored, said FTC Chairwoman Edith Ramirez.

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Connected home devices or cars, health trackers and other wearables can be useful tools for consumers, but the collection of personal data by the devices has some regulators worried.

Federal Trade Commission Chairwoman Edith Ramirez on Tuesday raised concerns about potential abuse of private user information during a session at CES, saying companies need to do more to develop products that protect consumer privacy and data.

“In the not too distant future, many, if not most, aspects of our everyday lives will be digitally observed and stored,” Ramirez said during an afternoon panel.

Those connected devices are also “collecting, transmitting, storing and often sharing vast amounts of consumer data, some of it highly personal, and thereby creating significant privacy risks,” she said.

FTC Chairwoman Edith Ramirez
FTC Chairwoman Edith Ramirez

Ramirez and other FTC officials have been trying to raise awareness over the past few years among consumer electronics and tech companies about the privacy and security concerns inherent in new smart home or car technologies, wearables and other new Internet of Things gadgets.

Last year, the agency hosted a day-long summit about possible regulation of Internet of Things devices. A report with the FTC’s findings is expected any day now.

The FTC doesn’t have authority to enact new regulations for Internet of Things devices, although it can use its existing authority to stop unfair trade practices and ensure companies comply with their privacy policies. Otherwise, Ramirez and other FTC officials can mostly just press industry to do more and nudge Congress to adopt new consumer privacy or cyber-security protections if companies don’t.

Ramirez repeated her call Tuesday for tech and consumer electronics companies to do three things to protect consumers: Bake security protections into new gadgets, collect and store the least amount of data possible and give consumers more information and choice about what is done with their data.

It’s not clear if companies will pay any attention, but Ramirez’s remarks — and her trip to Las Vegas to talk about Internet of Things concerns — highlight how the issue has landed squarely on Washington’s radar.

Partly that’s because of the growth in such devices. As we reported earlier this year, Ericsson estimated there were some 200 million “machine-to-machine” devices online by the end of 2013. There could be four times as many such connected devices in use within the next five years, the company estimated. In its annual forecast of mobile data usage, Cisco also predicted dramatic growth in the use of such devices over the next five years.

Like last year, there have been plenty of new devices on display at CES. Earlier this week, our Lauren Goode checked out a “smart” belt and a few other new connected and wearable gadgets on display this year at CES.

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