FTC Chair Speaks on Data Privacy and the Internet of Things

On January 6, 2015, Federal Trade Commission (FTC) Chairwoman Edith Ramirez delivered a speech discussing best practices for companies in the emerging market of the “Internet of Things,” which refers to the wireless interconnectivity of everyday devices, from home appliances to medical devices. Such devices are quickly becoming pervasive: In 2015, the number of interconnected devices worldwide is expected to reach 25 billion.

Chairwoman Ramirez expressed concerns about the consumer privacy risks associated with the Internet of Things because of the massive amount of personal information that can be collected and the new challenges this presents. The Chairwoman encouraged companies to practice data minimization and emphasized that companies should only collect the minimum amount of data necessary for the specific purpose at hand and then safely dispose of it. Companies were also called upon to build security features into their devices at the point of production, an approach referred to as “privacy by security.”

The FTC is expected to release a full report on the Internet of Things early this year. The report will be the culmination of a review that began in 2013 and is expected to comprehensively assess the privacy concerns associated with interconnected devices, as well as potential regulatory strategies.