Best practices to enhance privacy and security for the IoT

In a detailed report on the Internet of Things (IoT), the US Federal Trade Commission has recommended a series of concrete steps that businesses can take to enhance and protect consumers’ privacy and security.

The IoT universe is expanding quickly, and there are now over 25 billion connected devices in use worldwide, with that number set to rise significantly as consumer goods companies, auto manufacturers, healthcare providers and other businesses continue to invest in connected devices, according to data cited in the report.

The report includes the following recommendations for companies developing IoT devices:

• Build security into devices at the outset, rather than as an afterthought in the design process.
• Train employees about the importance of security, and ensure that security is managed at an appropriate level in the organisation.
• Ensure that when outside service providers are hired, those providers are capable of maintaining reasonable security, and provide reasonable oversight of the providers.
• When a security risk is identified, consider a ‘defence-in-depth’ strategy whereby multiple layers of security may be used to defend against a particular risk.
• Consider measures to keep unauthorised users from accessing a consumer’s device, data or personal information stored on the network.
• Monitor connected devices throughout their expected life cycle and, where feasible, provide security patches to cover known risks.

Commission staff also recommend that companies consider data minimisation - that is, limiting the collection of consumer data and retaining that information only for a set period of time, and not indefinitely. The report notes that data minimisation addresses two key privacy risks: first, the risk that a company with a large store of consumer data will become a more enticing target for data thieves or hackers, and second, that consumer data will be used in ways contrary to consumers’ expectations.

The report takes a flexible approach to data minimisation. Under the recommendations, companies can choose to collect no data, data limited to the categories required to provide the service offered by the device, less sensitive data; or choose to de-identify the data collected.

FTC staff also recommend that companies notify consumers and give them choices about how their information will be used, particularly when the data collection is beyond consumers’ reasonable expectations. It acknowledges that there is no one-size-fits-all approach to how that notice must be given to consumers, particularly since some Internet of Things devices may have no consumer interface. FTC staff identify several innovative ways that companies could provide notice and choice to consumers.

The report is partly based on input from leading technologists and academics, industry representatives, consumer advocates and others who participated in the FTC’s Internet of Things workshop held in November 2013, as well as those who submitted public comments to the commission. Staff defined the IoT as devices or sensors - other than computers, smartphones or tablets - that connect, store or transmit information with or between each other via the internet. The scope of the report is limited to IoT devices that are sold to or used by consumers.

Regarding legislation, staff concur with many stakeholders that any IoT-specific legislation would be premature at this point in time given the rapidly evolving nature of the technology. The report, however, reiterates the commission’s repeated call for strong data security and breach notification legislation. Staff also reiterate the commission’s call from its 2012 Privacy Report for broad-based privacy legislation that is both flexible and technology-neutral, though Commissioner Ohlhausen did not concur in this portion of the report.

In addition to the report, the FTC also released a new publication for businesses containing advice about how to build security into products connected to the Internet of Things. ‘Careful Connections: Building Security in the Internet of Things’ encourages companies to implement a risk-based approach and take advantage of best practices developed by security experts, such as using strong encryption and proper authentication.

The commission vote to issue the staff report was 4-1, with Commissioner Wright voting no. Commissioner Ohlhausen issued a concurring statement and Commissioner Wright issued a dissenting statement.

“We believe that by adopting the best practices we’ve laid out, businesses will be better able to provide consumers the protections they want and allow the benefits of the Internet of Things to be fully realised,” said FTC Chairwoman Edith Ramirez.