Published by LawTechie - September 5, 2013 - LawTechie

Internet lawBack in June, Steven Buchwald wrote here about the privacy implication of the “Internet of Things,” a term that is becoming popular for non-traditional smart devices, such as cars and everyday consumer appliances, which can now communicate with one another and with computer systems wirelessly. Steven set out a list of recommendations in order for consumer product manufacturers to minimize the potential legal exposure from their internet-ready “things” violating consumers’ privacy.

Now, as we predicted, the Federal Trade Commission (FTC) has filed its first complaint to protect consumers against the first internet thing to have gone wild: the notorious TRENDnet IP cameras that were in the news early this year for allowing hackers to peep into camera owners’ bedrooms, nurseries, etc…

According to The Verge:

While many IP cameras have open feeds that are semi-public and don’t require passwords, a close look at the Trendnet firmware revealed code that can be appended to the IP address of the camera, creating a URL of the camera’s feed that bypasses password authentication…

Other available cameras were found by searching shodanhq.com, a semi-shady site that catalogs open devices. Some of the more interesting camera feeds included a laundromat in Los Angeles, a bar and grill in Virginia, living rooms in Korea and Hong Kong, offices in Moscow, a Newark man watching the football game in a Giants jersey, and the inside of a turtle cage.

It didn’t take long for the FTC to step in. Forbes reports that the FTC has ordered TRENDnet to notify customers of the potential privacy flaws and to establish a comprehensive security program to fix the flaws. After this the FTC can fine TRENDnet $16,000 for every subsequent violation.

The takeaway: Much of what we describe as “disruptive technology,” which fuels our burgeoning tech startup market, would fall into the category of the “Internet of Things” — basic consumer goods that have been upgraded to function in our 21st Century realm of interconnecting wireless networks. Entrepreneurs and manufacturers need to be careful to employ and follow what are now fairly standard privacy protocols in order to avoid having these seemingly simple consumer goods create the same privacy headache (and litigation) that standard Web2.0 sites did when they first came out.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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