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FTC Releases Extensive Report on the “Internet of Things”

On January 27, 2015, U.S. Federal Trade Commission (FTC) staff released an extensive report on the “Internet of Things” (IoT). The report, based in part on input the FTC received at its November 2013 workshop on the subject, discusses the benefits and risks of IoT products to consumers and offers best practices for IoT manufacturers to integrate the principles of security, data minimization, notice and choice into the development of IoT devices. While the FTC staff’s report does not call for IoT specific legislation at this time, given the rapidly evolving nature of the technology, it reiterates the FTC’s earlier recommendation to Congress to enact strong federal data security and breach notification legislation.

The report also describes the tools the FTC will use to ensure that IoT manufacturers consider privacy and security issues as they develop new devices. These tools include:

  • Enforcement actions under such laws as the FTC Act, the Fair Credit Reporting Act (FCRA) and the Children’s Online Privacy Protection Act (COPPA), as applicable;

  • Developing consumer and business education materials in the IoT area;

  • Participation in multi-stakeholder groups considering guidelines related to IoT; and

  • Advocacy to other agencies, state legislatures and courts to promote protections in this area.

In furtherance of its initiative to provide educational materials on IoT for businesses, the FTC also announced the publication of “Careful Connections: Building Security in the Internet of Things”.  This site provides a wealth of advice and resources for businesses on how they can go about meeting the concept of “security by design” and consider issues of security at every stage of the product development lifecycle for internet-connected devices and things.   

This week’s report is one more sign pointing toward our prediction regarding the FTC’s increased activity in the IoT space in 2015. 

© 2020 McDermott Will & EmeryNational Law Review, Volume V, Number 28

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Our e-Business Group is composed of lawyers in the Firm's various offices and departments around the world. The Group is led by a core team of full-time technology transaction and e-business lawyers with historic practices in this area. Given the international scope and broad range of legal issues involved in important technology transactions and online trade, McDermott Will & Emery's breadth ensures that clients have access to leading-edge advice in any of the areas pertinent to the actual or proposed transaction or activity.

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