U.S. Senate Subcommittee: Respect for privacy vital for growth of the IoT

Policymakers are realising the enormous economic and social benefits that the IoT can offer – now follows the more serious discussion on its regulation.
On July 29, the U.S. Subcommittee on Courts, Intellectual Property and the Internet conducted a hearing on the Internet of Things (IoT), focusing principally on how regulation can serve growth and protect consumers’ privacy.
The Committee was witnessed by high profile Industry representatives: Gary Shapiro, CEO, Consumer Electronics Association, Dean Garfield, CEO, Information Technology & Industry Council, Mitch Bainwol, CEO, Alliance of Automobile Manufacturers and Morgan Reed, Executive Director, The App Association.
These Industry experts were questioned on the IoT’s economic and social impact and gave recommendations as to what regulations were needed in order for the IoT to grow safely and securely.
Privacy, regulation and transparency now on the agenda
Both Committee members and witnesses acknowledged that the IoT had developed so rapidly that existing privacy laws needed to be adapted in order to accommodate new ways in which data can be easily transmitted, stored and accessed.
Members of the Committee were fully supportive of the need to protect consumer privacy – Senator Poe claimed Congress “needs to set the expectation of privacy for individuals that have shared their information with different entities,” adding he was concerned providers might share that information both with non-government entities and also with the government.
Poe also argued that Congress should “update the [Electronic Communications Privacy Act of 1986] law”, which outlines that information stored in the cloud is private for six months, “but six months and one day, the government can have it and there’s no expectation of privacy”.
The message that resonated throughout the hearing was that the industry needs transparency – both in the context of governments accessing information about consumers but also in the context of companies informing their customers of how their data are shared. According to Morgan Reed of the App Association, “The problem comes when I have to tell a customer, ‘I don’t know’ when they ask which of their data could be passed along to the government”.
In his view, consumer concerns around data interception could severely hamper the growth of the IoT globally: “The United States’ data-sharing policies could affect privacy policies abroad…If the U.S. government says, ‘we have access to any cloud data at any time . . . regardless of where the data is stored and who [owns it],’ we have to expect that Russia will want to same privileges from our companies . . . that China will want the same privileges”.
Gary Shapiro of Consumer Electronics Association echoed this and stated that cooperation between industry and governments would allow the IoT to flourish. Industry prefers self-regulation over giving governments ‘backdoor access’: “history has shown that giving a government a backdoor is not the best approach as technologies evolve quickly,” but that “when a super crisis evolves, I think you’ll see companies step up and try to help government”. On the other hand, witnesses insisted that the current, relatively light and flexible regulation had allowed the IoT to develop rapidly across a number of sectors.
All witnesses emphasised that the IoT’s development depended on it having a greater allocation of spectrum. The IoT was cited as being an extension of the smartphone and according to Dean Garfield, the use of mobile data is increasing by 55 per cent each year, and that use of the IoT will lead this to grow ‘expeditiously’.
Industry forecasts are increasingly optimistic about the social and economic benefits stemming from the IoT and those in industry will be buoyed that key actors appreciate this and seem well disposed to industry-led practices. Having such prominent policymakers acknowledge that light and flexible self-regulation has led to innovation and thus scaled the IoT will reassure those in industry, as will the bold position of Committee Members who are resolved to bring greater privacy and transparency to the IoT.
Such developments are not limited to the U.S. and are part of a greater global trend – similar discussions taking place elsewhere in the world, predominantly in Europe, but also in Asia Pacific and other regions.