Government regulation on IoT

One of the key drivers of the IoT is data. The success of the idea of connecting devices to make them more efficient is dependent upon access to and storage & processing of data. For this purpose, companies working on IoT collect data from multiple sources and store it in their cloud network for further processing. This leaves the door wide open for privacy and security dangers and single point vulnerability of multiple systems. The other issues pertain to consumer choice and ownership of data and how it is used. Presently the regulators have shown more interest in protecting the first three issues identified above.[citation needed]

Current regulatory environment:

A report published by the Federal Trade Commission (FTC) in January 2015 made the following three recommendations:

Data security – At the time of designing IoT companies should ensure that data collection, storage and processing would be secure at all times. Companies should adopt a “defence in depth” approach and encrypt data at each stage.

Data consent – users should have a choice as to what data they share with IoT companies and the users must be informed if their data gets exposed.

Data minimization – IoT companies should collect only the data they need and retain the collected information only for a limited time.

However, the FTC stopped at just making recommendations for now. According to an FTC analysis, the existing framework, consisting of the FTC Act, the Fair Credit Reporting Act, and the Children’s Online Privacy Protection Act, along with developing consumer education and business guidance, participation in multi-stakeholder efforts and advocacy to other agencies at the federal, state and local level, is sufficient to protect consumer rights.

A resolution passed by the Senate in March 2015, is already being considered by the Congress. This resolution recognized the need for formulating a National Policy on IoT and the matter of privacy, security and spectrum. Furthermore, to provide an impetus to the IoT ecosystem, in March 2016, a bipartisan group of four Senators proposed a bill, The Developing Innovation and Growing the Internet of Things (DIGIT) Act, to direct the Federal Communications Commission to assess the need for more spectrum to connect IoT devices.

Several standards for the IoT industry are actually being established relating to automobiles because most concerns arising from use of connected cars apply to healthcare devices as well. In fact, the National Highway Traffic Safety Administration (NHTSA) is preparing cybersecurity guidelines and a database of best practices to make automotive computer systems more secure.