United States: Babies And Baby-Making, Or Not… Privacy And Security Lessons For The Internet Of Things

What do babies, sex toys and wireless head phones have in common? Apparently, the privacy concerns of the Federal Trade Commission (FTC), state AGs and legislatures, class action plaintiffs, and consumer advocacy groups, at least when it comes to the Internet of Things (IoT). The IoT refers to consumer devices that are connected, directly or indirectly, to the internet or other internet-connected devices.

Today cars, household appliances, so-called wearables like Fitbits, smart TVs, home command centers like Nest, Alexa and Google Home, and even sex toys and toothbrushes are collecting consumer data, often of a sensitive nature, and transmitting it over Wi-Fi, Bluetooth and the internet. The same privacy and data security issues that apply to computers and mobile phones apply to the IoT. Given the potentially sensitive nature of the data involved, the first generation of lawsuits and regulatory actions has involved babies, abortion, movie-viewing at home and vibrators. But these cases are not outliers, and there are lessons to be learned for all companies considering a foray into the IoT. And with the public notoriety these cases are generating has come the interest of the California legislature, which is considering legislation that would, among other things, codify data security obligations and require point-of-sale privacy disclosures and express consent to data collection.

The first IoT FTC action was TRENDnet, when, in September 2013, the maker of babycams that got hacked settled FTC deception and unfairness claims arising out of allegedly unreasonably inadequate security. A month later, the FTC settled with Aaron's Rent-To-Own, which rented computers to consumers equipped with "detective mode" software that was capable of capturing keystrokes and screen shots, and activating microphones and cameras. It was alleged that staff used this software not just to recover lost and stolen devices but to spy on users, including recording their most intimate acts. As part of the consent decree, Aaron's Rent-To-Own agreed to give notice at purchase of the software and its capabilities, and to give activation notice whenever it was used unless in response to a loss or theft report. This January, the FTC filed a lawsuit against connected camera-maker D-Link for unfairness arising out of allegedly unreasonable security, even though no security breach had yet occurred. For more detail, see our post here.

Not to be outdone, the Massachusetts attorney general recently took pre-emptive action against an ad tech company that had used geo-aware/geo-fencing technology to send pro-life/anti-choice ads to users of mobile phones that were proximate to abortion clinics. The AG obtained a commitment from the company not to send ads based on sensitive data to Massachusetts residents without clear and express prior consent. For more detail, see our post here.

The class action plaintiff's bar has seen the trend, as evidenced by the March 2017 $3.75 million settlement of a 2016 lawsuit in Illinois alleging that the "We-Vibe" marital aid, which allows users to give remote partners the ability to change settings through the internet or mobile connectivity and to live chat during sessions. The plaintiff alleged the manufacturer collected and kept usage info (e.g., times of use, battery life and intensity level) tied to user and partner emails without notice or consent, and that the plaintiff would not have bought the device, which allegedly was more expensive than similar competitor devices, if she had known of the tracking. There were no allegations of security breach or misuse – unjust enrichment, wiretapping and state law privacy violations arising out of the data practices. For more detail, see our post here.

And in April 2017, consumer protection group Access Now filed a complaint and request for investigation with the FTC alleging that the $250 internet-connected vibrator manufactured by Svakom and called "Siime Eye," which has a built-in camera and pleasure functions that the user can allow friends to access to view and manipulate sessions, was rife with security vulnerabilities, placing users' privacy at risk. The complaint alleges hackers have proved they can breach security, take over controls and access the camera view, and that while Svakom has promised a "secure connection," the default password is eight 8s, something hackers can easily guess to take over controls and access the camera both via Wi-Fi and the internet.

The latest company to be a target of a privacy class action lawsuit is Bose. The complaint filed on April 18, 2017 alleges that by using a companion app, the Bose wireless headphones was secretly collecting, transmitting, and disclosing its customers' private music and audio selections and selling the data to advertisers without notice or consent.

Finally, the FTC and the New Jersey attorney general recently settled with Vizio for $2.2 million. Vizio must destroy data and change its practices regarding its tracking of the viewing habits of users of its internet-connected smart TVs, and selling of that data to advertisers without, in the FTC's opinion, adequate consumer notice or choice. For more details, see our posts here and here.

The FTC has also given the IoT industry specific guidance on what it thinks would constitute reasonable privacy and security protections for IoT devices. This advice, if heeded, would have prevented most of the problems alleged in the cases and incidents discussed above. In June 2016, the FTC staff responded to a Request for Comments from the Commerce Department's National Telecommunications and Information Administration (NTIA), and that followed a January 2015 FTC Staff Report ("Internet of Things: Privacy & Security in a Connected World"). From these guidance materials, and the cases and incidents discussed, the following lessons can be discerned:

  • Build privacy and security into devices and software at the outset and continuously look for and cure deficiencies.
  • For sensitive data, a higher level of security should be provided.
  • Clear notice of and meaningful choice about data collection, use and sharing should be given to the consumer, particularly if the data is sensitive or its collection, use or sharing would be unexpected.
  • Even for less-than-sensitive data, provide info to allow consumers to decide whether and how their data will be collected and used, which in some cases may mean choosing not to buy or use the product, and in others would mean choice options.
  • Limit the amount of data collected/retained to what is needed, and limit access to it.
  • Secure data and securely dispose of data when no longer needed.
  • Train employees on good practices and monitor for knowledge and compliance.
  • Ensure downstream privacy and data protections via vendor contracts and oversight.
  • Apply defense-in-depth strategies that offer protections at multiple levels and interfaces.
  • Employ reasonable access controls.

While the FTC guidance is just that, and not law or regulation, it does reflect what the FTC staff thinks is required to avoid a deception or unfairness charge under the FTC's Section 5 authority. It may also not be long before there is specific legislation, at least at the state level. CA Senate Bill 327, introduced in February 2017 and amended March 20, proposes to codify privacy and security by design and allows specific enforcement actions for failure to employ reasonable data protection when developing any device "capable of connecting to the internet, directly or indirectly, or to a connected device," and for failure to promptly patch or otherwise cure later-discovered inadequacies and vulnerabilities. It would also require data collection notices, including a short-form notice at the point of sale regarding audio, video, biometric, health, sensitive or personal info, and require companies to obtain consent before collecting or transmitting such device or consumer information.

So, what are the lessons to be learned from the cases and incidents to date? First, IoT devices may have the ability to collect all sorts of data, some quite personal or sensitive, and consumers may not expect this data to be collected, used or shared. Next, follow the FTC guidance, including employing privacy-by-design and security-by-design principles. Finally, look to limit your liability with consumers through enforceable consents to clearly stated data and privacy practices, and through limitations on warranties, liability and class actions in user agreements that are affirmatively accepted prior to device data collection.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions