The next big thing in technology: 3 top challenges of ‘The Internet of Things’
The Internet of Things (IoT) refers to “smart” devices that transmit data via the Internet through both wired and wireless communication. These devices use sensors embedded in physical objects to follow programmed commands or to “learn” behavioral patterns through data collection.
The devices store this information and are able to recognize everyday behaviors of the owners of those devices. Common examples are when a thermostat device remembers the time of day when the user increases or decreases the temperature in his house or when a burglar alarm device senses that it should turn itself off when the user gets home.
The application of IoT reaches across both private life and business. For example, the NFL recently started putting sensors on players to understand where they are on the field at all times and to gather other statistics, such as running speed. The information these devices generate can help influence how a business should run; however, as these devices become more prevalent, there are some important things for companies to consider:
1. Data security
In order for IoT to be as effective as it can be, the devices will often need access to device owners’ personal information. Furthermore, the data these devices generate or use may be sensitive health or financial information and need to be protected. For example, devices that many fitness-conscious consumers wear can track the owner’s sleep patterns, pulse, activity levels, and other information that, while normally considered private, may end up anywhere in the world based on where the servers are that store the information and how the information is transmitted.
Companies, both as sellers and users of IoT devices, should consider the security of the data in relation to these devices. Especially when considering the recent cyber security breaches at The Home Depot, JP Morgan, and Target, companies will need to determine the best ways to protect these data, considering the amount and type of data stored on these devices, in the event of a security breach.
It is important for companies to develop strategies to protect information once it is collected and to stay on the right side of data-protection legislation in making sure that consumers know what information they are authorizing the device to learn or obtain.
2. Interpreting and using the data
IoT will likely change how companies make decisions. The up-to-the-second data will allow businesses to develop strategies based on the usage of the product, instead of the largely static information that today’s business models are based on. This could allow companies to alter marketing strategies on the go based on the data the devices produce, or to turn the data itself into a revenue-generating product. Further, as more devices are added to IoT, it is possible that interpretation of collected data will tell conflicting stories based on which metrics are tracked. Companies will need to develop strategies and systems to analyze the data, then decide which data to follow or how to combine the data for the best possible information for the company to use.
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3. Data ownership
Who will own the data? It is not necessarily the company that owns the technology. As these devices interact and collect vast amounts of data, the data will likely be shared and stored in multiple locations around the world.
As a device owner, it will be challenging to track with whom your data ultimately resides, especially in the age of data as a commodity to be bought and sold. For device sellers or creators, it becomes a business and legal decision to disclose the location of the data and whether they will sell or license the data. If your company does own or transmit the data, you must also ensure that the data-security safeguards you implement are proper based on the location of the data. For example, the European Union (EU) has stringent guidelines about storage and maintenance of personal information of EU citizens, while the United States is still developing guidelines and has largely allowed this to be regulated by the individual states.
As IoT is still developing, legal issues will continue to develop and arise. Many of these challenges can be addressed through proper contracting with involved parties, including end users of the devices.
Ariane C. Strombom (astrombom@whdlaw.com) is an attorney with Whyte Hirschboeck Dudek, S.C., where she practices corporate and technology law. Emily L. Hutchens (ehutchens@whdlaw.com) also practices corporate law at the firm.
