Digital Business

The Internet of Things – A Legal Perspective

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(Insert internet dial-up sound) “You’ve got mail”.  For a lot of people, these words immediately conjure up images of two iconic characters scrunched over their computer screens impatiently waiting to log in to their email accounts in a beloved movie of the same title. 

Whilst most of the audience swooned over the online romance between the lead characters, I enjoyed the commentary by the various characters on technology and their perceptions of how elements thereof either added to or subtracted from their lives. 

Akin to the movie, there are many members of society who, like the lead characters, embrace computers (and by analogy technology in general), whilst a minority of society (like the supporting character), shun or avoid certain innovations and prefer to stick to what is known and familiar. 

In this blog, I will briefly discuss the emerging phenomenon known as the Internet of Things (IoT) and add my opinion on whether it is an innovation that should be embraced or avoided by society. 

IoT in a nutshell 

In layman’s terms, IoT describes the relationship between a variety of devices (including objects such as kitchen appliances) that can now “connect” and exchange data with other devices via the internet.  These devices can now “communicate” in such a way that minimal action is required on our part. 

To be considered viable as an IoT device, the device needs to be able to connect to the internet and also be capable of integration with technology, such as software and sensors. 

Keeping the above requirements in mind, the application for IoT devices is virtually limitless! 

IoT in action 

Working late and still need to pick up your children?  Not a problem.  Soon your smart car could theoretically be programmed according to your schedule, be pre-programmed to not only find the quickest route to school but also locate safe parking, collect the children from school, and automatically adjust to your child’s favorite songs (insert most recent princess animation movie here), their preferred temperature settings and drive itself back to the office.  All with a simple click on your smartphone.   

The application of IoT lends itself to so many different possibilities, whether it be to simplify the lives of the everyday citizen or to provide breakthroughs on medical, environmental, and industrial fronts. 

As illustrated with the above scenario, the success of emerging innovations will therefore depend on a variety of different technologies, such as artificial intelligence, network technology, and cloud computing for it to have long-term success.   

But let’s park the smart car concept for now and get back to reality.   

The downside of innovation   

Every emerging innovation brings with it a whole new frontier of legal issues to consider. 

From a legal point of view, security is of the foremost aspects I would consider: Smart devices are extremely vulnerable to being hacked as its dependent on software.   

The competitive market drives the speed at which innovations are being presented and leads to weakened security as the focus is often on being ahead of the curve and less thought is often given to the analysis of cyber security risks and protecting users against it. 

This in turn can lead to sensitive data being stolen and breaches in the privacy of individuals. 

In some instances, it can be possible to fix these vulnerabilities in the devices over the internet, but this is not always the case.   

Consider this: To rectify a problem, the user must first be aware of it.  The simple fact is that it would be impossible for the manufacturer of the defective device to inform all users of the product because it would only be aware of the registered users and many users do not take the time to register the products or instead opt to purchase used products. 

Even if the user is made aware of the defect, the patches to rectify the defect must be manually downloaded and installed.  This will be a big challenge for the average user.  Sometimes the easy way out would be to purchase a new device.  But even that is not necessarily a guaranteed solution. 

Protecting data privacy  

I turn now to the privacy of data.  Devices collect our information daily. There are growing concerns about the storage of data, the access thereto, and its impact on our right to privacy.  Whilst data protection regulations are more strictly enforced nowadays in the form of the European General Data Protection Regulation (GDPR), and its South African equivalent, the Protection of Personal Information Act, there are still no unified data protection mechanisms in place.  This is a great cause for concern as IoT devices routinely access cross-border information.   

Therefore, a unified approach to the regulation of data needs to be implemented sooner rather than later. 

As a legal eagle, I would therefore advise companies to not only consider how they would strengthen their security but also how they would respond to the exchange of data and breaches. 

Another aspect I would be concerned about is liability: By still using the smart car as an example, who would be liable if the car starts to speed or still worse, causes an accident?  Therefore, carefully worded liability clauses will need to be incorporated into any agreement or subscription service for apps. 

An improvement or a nuisance? 

On a more practical note, many people are already overwhelmed by the number of electronic communications received daily.  What will the psychological effects be when the smart devices start to send similar notifications?  Whilst technology can serve to improve our lives, we must be mindful to not let it overrun our lives and set boundaries.  This is something we do need to keep in mind. 

Legislatively speaking, we will also need to re-examine our existing legislation to address the challenges that IoT can create.  The interconnected use of devices is already creating cross-industry challenges and will need to be adequately addressed.  As indicated in my previous blog, it is the reality that regulations tend to be outpaced by innovation. 

In consideration of the above challenges, I am however optimistic that these challenges are not insurmountable and embrace the innovation that it brings.   

The IoT is a very exciting new development that presents a lot of opportunities.  It will however be vital to make sure that society has the legal requirements in place to address the challenges that innovation could inadvertently create. 

Anke Claassen
In-House Legal Counsel, Mint Group. As the legal eagle of Mint, it is my job description to both embrace the innovation that technology brings and simultaneously ensure that it is balanced with the legal compliance measures to ensure sustainable growth and development. It is a challenge I look forward to every day.

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