January 18, 2018

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FTC Urges Prescient End-of-Life Strategy for Internet of Things Products

The Federal Trade Commission (FTC) recently warned that Internet of Things (IoT) products and services that are no longer operational, updated, or supported present significant issues related to consumer expectations, security, and privacy. Although the FTC noted the industry’s bright future within a product sunset context, the implied “parade of horribles” could have been framed in the grim style of poet Archibald MacLeish as an “ever climbing shadow.”

Internet-connected devices that cease functioning properly or, as expected, could lead to problems on several levels. For example, some IoT devices and services will be serving safety and other important roles, and malfunctions could lead to injury, property damage, and theft, especially if consumers are unaware of product limitations. Second, out-of-date IoT products are more likely to be vulnerable to hackers and bugs. Finally, because IoT products will be tangled in a web of connections, security failures in one device could spill over to other devices and “put consumers’ sensitive data at risk.”

The FTC encouraged IoT businesses to think through product sunset issues ahead of time and to clearly communicate to consumers what to expect regarding IoT products, such as

  • a device’s nature and function,

  • how long a product will be functional or otherwise usable,

  • the risks of using a product past its life expectancy,

  • how and when a product will be updated, and

  • the extent and duration for which a product’s security will be maintained.

Although seemingly brilliant, the future of the IoT revolution may depend on whether the industry comprehensively addresses product weaknesses and end-of-life strategy, taking heed of “how swift how secretly the shadow of the night comes on…”

Copyright © 2018 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Partner

Rahul Kapoor is a partner in Morgan Lewis's Business and Finance Practice, the firmwide hiring partner, and a member of the firm's Legal Personnel and Finance Committees. Mr. Kapoor has deep transactional experience in strategic alliances, joint ventures, corporate partnering transactions, standards body licensing structures, intellectual property strategic counseling, technology licensing, open source software strategy, electronic commerce and privacy, supply and distribution agreements, consignment agreements, spin-outs and core technology licenses, IT outsourcing...

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A. Benjamin Klaber, Morgan Lewis Law Firm, Finance Attorney
Associate

A. Benjamin Klaber is an associate in Morgan Lewis’s Business and Finance Practice. The lawyers in our Business and Finance Practice focus on mergers and acquisitions (including joint ventures, spin-offs, and strategic alliances), finance and restructuring, securities (including public and private equity and debt offerings), and tax. Clients range from Fortune 500 companies to investment banks to emerging market companies.

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