The massive amount of data these new wearable devices stand to collect, the sensitive nature of the content and the uncertainty about how the information can be used have all raised concerns that consumers are being lured into uncharted territory that will compromise their privacy. Exacerbating the problem, some privacy advocates say, are recent Food and Drug Administration guidelines on medical apps that make no mention of privacy — making it unclear who should regulate health data pulled from wearable devices.
“The word ‘privacy’ does not appear in” the FDA’s rules, said Robert Gellman, a Washington-based privacy and information policy consultant. “This shows lots of things fall between the cracks.”
The Federal Trade Commission has said it will study the growth of Internet-connected sensors, which can appear in products as varied as watches, headsets, refrigerators and medicine bottle caps, and it has set a meeting for next month. But privacy advocates are concerned the wearable-tech industry is exploding while regulators take a back seat.
“The mobile device is a digital Trojan horse for privacy, since it enables marketers to know both our exact location and where we spend our time,” said Jeffrey Chester, executive director of the Center for Digital Democracy. “We’ve entered a world where a consumer is identified, analyzed, tracked and can be targeted nearly 24-7.”
The possibilities for wearable tech are enormous. One can now wear a powerful computer in millimeters of fabric, a weightless monitor of one’s location, heartbeat, physical habits and moods. There is even a way to spy on your newborn; the Owlet smart sock allows parents to monitor their infant’s temperature — and even whether the baby has rolled over — with their smartphones.
Analysts have estimated that the market, which generates about $3 billion to $5 billion per year, could grow tenfold over the next three to five years as big players jump into the arena.
Samsung is testing the waters with its smart watch. Google will begin selling its Glass headset next year, allowing users to snap pictures, record video and read messages on a screen hovering over one eye. Apple is widely expected to jump into the wearable market soon, analysts say. The company’s new iPhone 5s already includes a movement chip that can automatically detect, for example, if a user is walking or driving when it provides map instructions.
“The upside of wearables far outstrips concerns,” said Morgan Reed of the Association for Competitive Technology, a trade group for app developers. “We’re dealing right now with the ‘I don’t know,’ but we would rather take those possibilities to ask what we can make with this technology.”
What really concerns privacy hawks, however, is that consumers may not be aware of the scale of data being collected — or how it could be used. User data, for example, could end up with firms that customize credit card offers based on users’ shopping habits or insurance rates based on eating habits, all based on data collected through wearable devices, privacy advocates say.
An increase in Internet-connected devices “has the potential to exacerbate the power imbalance between consumers and the companies with which they conduct business,” the Electronic Privacy Information Center said in a filing to the FTC. “Information is power, and smart devices will provide much more information about consumers’ behavior to companies than has been traditionally available.”
But Google, like other companies jumping into the wearable market, says its devices simply supplement what people are already doing daily with their smartphones. Samsung is marketing the Gear as a second screen for its Galaxy Note 3 smartphone and says it collects the same information.
“We’re not saying this is the new technology and it demands this data — your phone has all of this information anyway,” said Ryan Bidan, Samsung’s director of product marketing. “We’re just letting you use information that you already have in different ways.”
Bidan said users should not be concerned, because the data collected by the watch are covered under existing privacy policies, though as the industry grows, government regulation may be necessary.
“This technology is still evolving really rapidly,” he said. “As more sensors and devices show up on the market, I imagine it would be of more importance” for the government to step in, he said.
The government is already paying close attention to wearable tech that collects health information.
The FDA said last week that it plans to focus its regulation on apps that collect and analyze medical information that can be tied to a specific user or be used to diagnose ailments. Most wearable tech, including heart monitors, weight calculators, pedometers and diet trackers, will fall outside government review.
That is a relief, said Reed, of the app developers’ trade group. App developers had feared that a lengthy government review process would hamper the industry’s growth, he said.
The FDA’s initial recommendations are not a “perfect answer,” Reed said, but offer some guidance on the difference between “something that’s clinical and something that’s merely beneficial to patient health.”
But the conversation around wearables and medical data is far from over.
“Health information is so sensitive, its collection may raise unique privacy concerns,” said the FTC’s Maneesha Mitha, associate director of privacy and identity protection. “We hope to discuss the health benefits of these kinds of devices, the privacy risks they pose and the ways in which companies can mitigate these risks by ‘baking in’ privacy throughout the product design process.”