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FTC Report Calls for Consumer Privacy Safeguards

The rise of Internet-connected devices is prompting concerns about data security.

By University Alliance on March 04, 2015
Regulators Propose Consumer Privacy Measures

Whether you are working out at the gym, cooking a meal, running an errand, listening to music or watching television at home, many of the innovative devices we use each day to make life easier are designed to send and receive data via the Internet.

However, in the so-called era of the “Internet of Things,” such convenience can lead to breaches in data security, potentially placing consumers’ sensitive personal information at risk.

In an effort to protect American shoppers, federal regulators are proposing a series of safeguards to help businesses protect customer privacy and security. Among the recommendations issued recently by Federal Trade Commission (FTC) staff: 

  • Consider security when designing Internet-connected devices instead of retroactively adding safety measures
  • Educate employees about the importance of security
  • Ensure that third-party service providers have the capability to support adequate security levels
  • Consider using multiple layers of security measures, or a “defense-in-depth” strategy, to protect against specific threats
  • Institute protections to prevent unauthorized access to consumers’ personal information, data or devices
  • Establish life-cycle monitoring of Internet-connected devices and issue security patches as necessary

“The only way for the Internet of Things to reach its full potential for innovation is with the trust of American consumers,” Edith Ramirez, the FTC’s chairwoman, said in a January 2015 statement.

Information for the 55-page report was gathered during the FTC’s Internet of Things workshop in 2013, which included consumer advocates, tech experts, academics and industry representatives. The agency also sought public comment.

Concerns about consumer privacy have exploded in the past decade as the number of Internet-connected devices has skyrocketed to an estimated 25 billion worldwide. Heart monitors, home security systems, high-tech garage door openers, smart cars and smartphones are just a few examples of the multitude of connected devices.

“From a security and privacy perspective, the predicted pervasive introduction of sensors and devices into currently intimate spaces – such as the home, the car, and with wearables and ingestibles, even the body – poses particular challenges,” the report notes.

The FTC staff report also recommends that companies limit the volume of customer data they collect and store, and that they provide consumers with options as to how their information will be used.

In conjunction with the recommendations, the commission also issued guidance for businesses seeking to design and market Internet-connected devices.

The FTC report was released just two weeks after President Barack Obama proposed legislation that would require companies to notify customers within 30 days of cybersecurity breaches that exposed their personal data. Additionally, the president called for a Consumer Privacy Bill of Rights to control how consumers’ personal information is used and stored by companies.

Category: 2015 Headlines