Canada: Hackable Barbies, Malicious Poodles: PIPEDA Compliance And The Internet Of Things

She stands just under a foot tall, has a résumé that includes such storied accomplishments as astronaut, registered nurse, and Presidential candidate.  Whether cropped or worn shoulder-length, her iconic blonde hair has been inspiring popular culture since well before Madonna.  She's owned more dream homes than most real estate magnates, and earlier last month Barbie tried out a brand new accessory that has been turning heads ever since—an AzureWave AW-CU300E 802.11 b/g/n WiFi Microcontroller Module.

In early November, toymaker Mattel took the plunge into the internet of things ("IoT") with one of its most recognizable brands.  "Hello, Barbie", a WiFi-enabled doll equipped with voice recognition technology, allows this edition of the popular Barbie doll to use a cloud-based intelligence to assess speech from a child and choose an appropriate response from more than 8,000 lines of pre-recorded dialogue.

Mattel is not the only toymaker marketing a children's product in the IoT category this holiday season.  Fisher-Price has introduced a line of WiFi connected stuffed bears, pandas, and monkeys that similarly listen to children and remember and adapt to interactions with a child.  Disney has also introduced a series of super-hero themed wearables that allow children to take part in pre-programmed adventures while tracking battle statistics and allowing users to download additional missions and receive messages.

Risk and the Internet of Things

Connecting to the internet is not without risk, however. Recently,  information security firm Bluebox Labs reported on several security vulnerabilities in toymaker Mattel's mobile app and cloud-based servers.  Of particular note was the vulnerability of the servers operated by Mattel's partner, ToyTalk, to a POODLE attack, which exploits the basic SSLv3 protocol for encrypting web traffic.  While Bluebox reports that many of the security issues have since been resolved, security analysts have been aware of the POODLE vulnerability since late 2014, which had the media raising questions about the information security rigour exercised by businesses developing IoT connected devices.

Mattel is not the only IoT producer to have encountered information security concerns in the past few weeks.  On November 27th, Hong Kong-based supplier of children's connected learning toys, VTech, reported an intrusion against their Learning Lodge customer database and Kid Connect servers affecting over 5 million parent profiles and 6.5 million child profiles.  The company has yet to confirm whether chat logs, audio files and pictures of children were taken.

The intersection of information security and privacy on the IoT is a familiar topic.  CyberLex readers may be familiar with the speech given by Daniel Caron, Legal Counsel at the Office of the Privacy Commissioner at the 2014 Information Security Rendez-vous.  In his speech, Caron suggested businesses must be prepared to adopt a new information security paradigm for IoT system technologies.  In particular, quoting an IT security expert, Carron wryly suggested that wherever the word "software" appears in a system, developers should replace it with the word "hackable".  Similarly, Carron suggested that, from an information security standpoint, the word "connection" should be synonymous with the word "exposed".

 IoT Products and Personal Information

While all business operating in the IoT should take note of the requirements of Canadian laws governing the collection, use and disclosure of personal information, the advent of IoT toys marketed at children raises particular compliance risks and will likely put Canada's technology-neutral privacy laws to the test.  These learnings may extend to other sensitive personal information such as health data from fitness wearables and information about driving habits that may affect insurability and licensing to name but a few examples.

Businesses in Canada that market information systems that collect or utilize personal information are required to have security measure in place that correspond to the level of sensitivity of the information they are collecting.  While businesses may plan to protect routine information such as an end-user's name and email address, special care and attention should be given to the wealth of consumer data that these IoT products may be recording about the habits and preferences of end-users, particularly when this data concerns the activities of children at play in an environment with a high expectation of privacy (living-rooms, bedrooms, etc.).

Valid Consent

Businesses should recall that Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) requires meaningful consent to the collection, use, and disclosure of personal information—when it comes to tracking the activities and preferences of children, meaningful consent may be harder to establish.  As early as 2011, in a guide published by the Office of the Privacy Commissioner, it was suggested that, as a best practise, "organizations should avoid tracking children and tracking on websites aimed at children".  The Digital Privacy Act, proclaimed on June 18, 2015, modified the requirement for valid consent within PIPEDA by arguably requiring businesses to adapt the consent process to the sophistication of a particular end-user.  A corresponding government press release suggested simple language would be required when dealing with vulnerable Canadians, like children.

Understandably, the value organizations hope to harvest from the IoT is based on a capability to capture, analyze, and act upon data recorded by connected devices.  In this area, Canadian law does not provide a bright line, workable standard for businesses looking to comply with Canadian privacy laws and highlights a shortcoming in comparison to other jurisdictions where more particularized guidance regarding children's online privacy is contemplated.  For instance, in addition to state-level laws protecting children and students, in the United States the Children's Online Privacy Protection Act ("COPPA"), offers distinct protection for children's online privacy throughout the country.  COPPA, sets out, for instance, a definition of "Verifiable parental consent" and provides express carve-out related to certain activities of children.

The Mattel/ToyTalk release of a connected product with a security vulnerability to a known exploit raises another important issue businesses should consider when making the decision to develop products for the IoT.  Businesses should consider more than the costs of information security measures that arise during development.  IoT businesses should factor into the costs analyses of their connected devices those ongoing product lifecycle costs associated with monitoring for potential threats, notifying consumers of identified vulnerabilities in their product mix, and patching any such vulnerabilities.

This concern is particularly pressing given the introduction of breach reporting under PIPEDA by the Digital Privacy Act.  As the cost of networking technology continues to decrease, more disposable and high-turnover products are being loaded with WiFi and data-gathering capabilities.  In order to comply with Canadian privacy laws, businesses must, however, continue to keep in mind the compliance necessity of securing those devices, the applications that support them, the channels of communication utilized by the devices, and the servers with which the devices are communicating.  Given the multitude of communication protocols that may be in production at any time, this may not be an easy task.  Where possible, businesses should strive to maintain an up-to-date technology architecture that requires developers to consider information security and privacy at all steps of the development cycle (so-called "security-by-design") and should not treat information security as a discrete task at the end of product development.  Such measures will ease the burden of undertaking comprehensive and contextual threat monitoring.

As for Mattel/ToyTalk's decision to board up the doggy door into Barbie's dream home and lock out poor POODLE, I've heard Barbie is more of a cat person anyways.

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