Contact us on

020 7611 4848

email us


Arrange a Callback

Ask a Question

The Internet of Things will Affect Businesses as Producers and Users

Wednesday, 5 November 2014

The invasion of the smartphone into our lives has created a revolution in the way we communicate and organise ourselves. Another revolution is on the way though which individuals and organisations already need to start preparing for, that is the internet of things.

The Internet of Things (IoT) refers to a future decentralised network of interconnected objects which can sense and interpret one another, communicating information either unilaterally or in connection with other objects.

The prospect of a future in which society increasingly features a physical world being controlled by a digital one features in much dystopian literature but the associated negativities do not end there.

The onset of IoT is likely to raise a whole new dimension of security and privacy concerns while user expectations are rising rapidly at the same time. Legal complexities are unavoidable.

Digital Technology Compliance Risks in the Internet of Things

Supremely fast digital technology growth has paved the way for big data to transform every modern business model. Rapid evolution carries inherent risk on various fronts though, not least in legal and compliance.

Tech companies such as Twitter and Google find themselves facing increasing compliance risks with regard to the extent of personal information that the company can act upon in respect of a given user. Furthermore, with the increase in trading or sharing of such data between various organisations the proposition that data is always anonymised increasingly fails to find as much evidential support as the contrary. This is especially pertinent to organisations freely cross-referencing data so as to develop more accurate analyses of user wants and needs.

The issue is likely to be greatly exacerbated as basic objects such as fridges and door locks produce even more detailed information about our daily lives to manufacturers and businesses that collect data.

Privacy and security laws will thus face their greatest challenge from the IoT as businesses compete to meet users’ needs and desires.

Data Ownership in the Age of Big Data

As ever greater levels of personal information are captured, there is an open question regarding data ownership. In as much as a user is participating in the creation of data, where they are often the subject, then there is argument that device-ownership may also entail, in some circumstances, data ownership.

At the moment, terms and conditions of use – agreed at the outset of purchasing and using the product (whether hardware or software) –accommodates minimal litigation in this area. However, the rise of IoT will prove the law immature insofar as a wholly interconnected world of devices, objects, appliances, infrastructure and roads is concerned. Litigation is therefore only likely to grow in this area.

Big Data and Cybercrime

The future interconnecting of previously independent systems and holders of data also presents businesses and criminals with the opportunity to abuse the IoT.

Frequently, there is the assumption amongst business that new services or products must be embedded with various device-connectivity, lest they be trounced by their more tech-savvy competitors.

Therefore, claims such as that against TRENDnet in the U.S. (where personal cameras sold as “secure” were open to online viewing), are likely to become the rule and not the exception, as precedent is set and statute enacted in order to counter the increasing probability that products will be launched before all potential security issues are ironed out.

The same product designs, failing to account for the potential for unsecure connections, may lead a host of companies finding themselves liable in tort and contract law, for misrepresenting the security or accuracy of the product.

In addition, as end-users and indeed other businesses, conform to norms on device-reliance, the presumption that the technology will do its job will also lead to raised expectations. If IoT devices fail to provide accurate information, such as the location of the user or the unused capacity in a refrigerator, then actions may also be brought against sellers or manufacturers.


Expectations about device capabilities are likely to continue to rise. As it stands, there it is reasonable to believe that the IoT will improve the efficiency of our lives but at the cost of privacy and security.

Individual users, business users, product manufacturers and distributors, and data controllers are likely require a keen eye for these often conflicting issues as technological developments run into existing legislation and new legislation is implemented.

For specialist advice regarding privacy or data protection contact Peter Gourri today by email or telephone 0207 611 4848.

No comments:

Post a Comment