3 Ideas in the FTC Speech at CES

federal-trade-commission-seal-36081_1280Privacy concerns are nothing new for the technology industry. Yet, many outlets (like this one and this one) rightly noted that there was something newsworthy when Federal Trade Commission Chairperson Edith Ramirez shared her perspectives on the Internet of Things (IoT) at the Consumer Electronics Show last month. The details of what she said have been well covered so I won’t dwell on them here. Suffice to say that the government is not worried about the IoT as an industrial Internet making manufacturing and distribution systems more efficient. The FTC chair is worried about the consumer implications.

I was not directly involved in any speech at CES this year, so I feel a little freer than usual to share a reverse engineering of the FTC speech. Here, I want to read her words more closely to spy the ideas that motivated them. These ideas are percolating through the US government to the point they found some expression at a forum as high profile as CES.

Make of this what you will. I am not attempting to make value judgments here though many enthusiastic discussions could grow from these seeds. With those disclaimers, three ideas arise from a close reading of the text of the speech.

1. The IoT is not a technology, it is an environment

Privacy concerns have been around many years. The IoT is different, though, according to the FTC.

Sharing is a conscious action we take. We give up information knowing we will get that “like” from a friend or free shipping from Amazon etc. The IoT, however, removes this necessity for conscious action to produce data. It creates an environment in which the motions of everyday life are harvested as data without anyone needing to consciously take an action (like posting a status update) to produce that data. The FTC sees this as a game changer.

The word “ubiquitous” shows up quite often in the prepared remarks. She notes the 25 billion connected devices expected to be out there – everywhere – this year. She speaks of data being collected in any space – even “intimate spaces” – and the “ocean” of data that will be produced. All these images speak to the IoT being an environmental phenomenon that we cannot escape – like the earth we walk on, ocean we swim in and the invisible atmosphere in which we exist. The FTC sees the IoT as a new invisible atmosphere that we exist in – willingly or not.

2. Such an environment will incubate new kinds of players

In the shadow of the Sony hack, FTC Chair Ramirez reminded people of the security concerns created by this new environment that will have billions and billions of entry points to hack your personal data. Yet, she did not stop there. This environment will create new kinds of people who are simply creatures of that environment as sure as evolution created big fish and little fish to populate that enormous ocean.

Santa knows if you’ve been naughty or nice, but at least you also know when you told a fib or stole from the cookie jar. FTC Chair Ramirez raises the specter of a set of people who can at least claim to know you better than you know yourself. These people have access to the intimacies and banalities of your life. They will be empowered to produce a profile of you that others can pay to see, but you will never see. Such people are essentially called into existence by this environment and they can begin reshaping parts of your life without you even knowing it.

Wouldn’t prospective employers want to know who you really are when no one is looking? Wouldn’t universities want to know if you really are the person you claim to be in that entrance essay? Someone who knows how to manipulate all this data can sell a picture of you compiled from your social media accounts, your thermostat, your car and your toothbrush. These voyeurs need not be black hats like the infamous hackers. The environment is capable of producing people who simply take the power they find in this environment as a given and do something with it that others will pay for.

3. Such an environment needs a hero

Spoiler alert! In the film “Captain America: The Winter Soldier” the titular captain foiled a massive data-driven plot to reshape the world to make it “safer” and more orderly. In essence, the conspiracy so offended his values that Captain America was called into action to reshape the environment in which he found himself. FTC Chair Ramirez called for such a hero.

Who is this masked person with the colorful shield? Well, it could be an entrepreneur, someone like Captain America who has certain skills that can be employed when that environment offends his or her values. Ramirez held out the idea that this scary version of the IoT needed consumer “trust” to function effectively and someone supplying that trust would be rewarded. Many CES attendees might respond to that call to action.

No doubt this is the preferred third act in her dystopian tale. Yet, the FTC chair’s trek to CES is a tangible message that government will enter the IoT environment and play that role of hero if necessary. Of course, the European Union and the European Court of Justice have already made that point on the other side of the pond.

These three ideas appear to motivate the speech and set the scene for the relationship between industry and government over the IoT. 2015 will be an interesting year for security and privacy. My thermostat told me so.

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