EU Privacy Rules Can Cloud Your IoT Future

24 Feb

When technology companies and communication service providers gather together at the Mobile World Congress (MWC) next week in Barcelona, don’t expect the latest bells-and-whistles of smartphones to stir much industry debate.

Smartphones are maturing.

In contrast, the Internet of Things (IoT) will still be hot. Fueling IoT’s continued momentum is the emergence of fully standardized NB-IoT, a new narrowband radio technology.

However, the market has passed its initial euphoria — when many tech companies and service providers foresaw a brave new world of everything connected to the Internet.

In reality, not everything needs an Internet connection, and not every piece of data – generated by an IoT device – needs a Cloud visit for processing, noted Sami Nassar, vice president of Cybersecurity at NXP Semiconductors, in a recent phone interview with EE Times.

For certain devices such as connected cars, “latency is a killer,” and “security in connectivity is paramount,” he explained. As the IoT market moves to its next phase, “bolting security on top of the Internet type of architecture” won’t be just acceptable, he added.

Looming large for the MWC crowd this year are two unresolved issues: the security and privacy of connected devices, according to Nassar.

GDPR’s Impact on IoT

Whether a connected vehicle, a smart meter or a wearable device, IoT devices are poised to be directly affected by the new General Data Protection Regulation (GDPR), scheduled to take effect in just two years – May 25, 2018.

Companies violating these EU privacy regulations could face penalties of up to 4% of their worldwide revenue (or up to 20 million euros).

In the United States, where many consumers willingly trade their private data for free goods and services, privacy protection might seem an antiquated concept.

Not so in Europe.

There are some basic facts about the GDPR every IoT designer should know.

If you think GDPR is just a European “directive,” you’re mistaken. This is a “regulation” that can take effect without requiring each national government in Europe to pass the enabling legislation.

If you believe GDPR applies to only European companies? Wrong again. The regulation also applies to organizations based outside the EU if they process the personal data of EU residents.

Lastly, if you suspect that GDPR will only affect big data processing companies such as Google, Facebook, Microsoft and Amazon, you’re misled. You aren’t off the hook. Big data processors will be be initially affected first in the “phase one,” said Nassar. Expect “phase two” [of GDPR enforcement] to come down on IoT devices, he added.

EU's GDPR -- a long time in the making (Source: DLA Piper)
Click here for larger image

EU’s GDPR — a long time in the making (Source: DLA Piper)
Click here for larger image

Of course, U.S. consumers are not entirely oblivious to their privacy rights. One reminder was the recent case brought against Vizio. Internet-connected Vizio TV sets were found to be automatically tracking what consumers were watching and transmitting the data to its servers. Consumers didn’t know their TVs were spying on them. When they found out, many objected.

The case against Vizio resulted in a $1.5 million payment to the FTC and an additional civil penalty in New Jersey for a total of $2.2 million.

Although this was seemingly a big victory for consumer rights in the U.S., the penalty could have been a much bigger in Europe. Before the acquisition by LeEco was announced last summer, Vizio had a revenue of $2.9 billion in the year ended in Dec. 2015.

Unlike in the United States where each industry applies and handles violation of privacy rules differently, the EU’s GDPR are sweeping regulations enforced with all industries. A violators like Vizio could have faced much heftier penalty.

What to consider before designing IoT devices
If you design an IoT device, which features and designs must you review and assess to ensure that you are not violating the GDPR?

When we posed the question to DLA Piper, a multinational law firm, its partner Giulio Coraggio told EE Times, “All the aspects of a device that imply the processing of personal data would be relevant.”

Antoon Dierick, lead lawyer at DLA Piper, based in Brussels, added that it’s “important to note that many (if not all) categories of data generated by IoT devices should be considered personal data, given the fact that (a) the device is linked to the user, and (b) is often connected to other personal devices, appliances, apps, etc.” He said, “A good example is a smart electricity meter: the energy data, data concerning the use of the meter, etc. are all considered personal data.”

In particular, as Coraggio noted, the GDPR applies to “the profiling of data, the modalities of usage, the storage period, the security measures implemented, the sharing of data with third parties and others.”

It’s high time now for IoT device designers to “think through” the data their IoT device is collecting and ask if it’s worth that much, said NXP’s Nassar. “Think about privacy by design.”

 

Why does EU's GDPR matter to IoT technologies? (Source: DLA Piper)

Why does EU’s GDPR matter to IoT technologies? (Source: DLA Piper)

Dierick added that the privacy-by-design principle would “require the manufacturer to market devices which are privacy-friendly by default. This latter aspect will be of high importance for all actors in the IoT value chain.”

Other privacy-by-design principles include: being proactive not reactive, privacy embedded into design, full lifecycle of protection for privacy and security, and being transparent with respect to user privacy (keep it user-centric). After all, the goal of the GDPR is for consumers to control their own data, Nassar concluded.

Unlike big data guys who may find it easy to sign up consumers as long as they offer them what they want in exchange, the story of privacy protection for IoT devices will be different, Nassar cautioned. Consumers are actually paying for an IoT device and the cost of services associated with it. “Enforcement of GDPR will be much tougher on IoT, and consumers will take privacy protection much more seriously,” noted Nassar.

NXP on security, privacy
NXP is positioning itself as a premier chip vendor offering security and privacy solutions for a range of IoT devices.

Many GDPR compliance issues revolve around privacy policies that must be designed into IoT devices and services. To protect privacy, it’s critical for IoT device designers to consider specific implementations related to storage, transfer and processing of data.

NXP’s Nassar explained that one basic principle behind the GDPR is to “disassociate identity from authenticity.” Biometric information in fingerprints, for example, is critical to authenticate the owner of the connected device, but data collected from the device should be processed without linking it to the owner.

Storing secrets — securely
To that end, IoT device designers should ensure that their devices can separately store private or sensitive information — such as biometric templates — from other information left inside the connected device, said Nassar.

At MWC, NXP is rolling out a new embedded Secure Element and NFC solution dubbed PN80T.

PN80T is the first 40nm secure element “to be in mass production and is designed to ease development and implementation of an extended range of secure applications for any platform” including smartphones, wearables to the Internet of Things (IoT), the company explained. Charles Dach, vice president and general manager of mobile transactions at NXP, noted that the PN80T, which is built on the success of NFC applications such as mobile payment and transit, “can be implemented in a range of new security applications that are unrelated to NFC usages.”

In short, NXP is positioning the PN80T as a chip crucial to hardware security for storing secrets.

Key priorities for the framers of the GDPR include secure storage of keys (in tamper resistant HW), individual device identity, secure user identities that respecting a user’s privacy settings, and secure communication channels.

Noting that the PN80T is capable of meeting“security and privacy by design” demands, NXP’s Dach said, “Once you can architect a path to security and isolate it, designing the rest of the platform can move faster.”

Separately, NXP is scheduled to join an MWC panel entitled a “GDPR and the Internet of Things: Protecting the Identity, ‘I’ in the IoT” next week. Others on the panel include representatives from the European Commission, Deutsche Telecom, Qualcomm, an Amsterdam-based law firm called Arthur’s Legal Legal and an advocacy group, Access Now.

Source: http://www.eetimes.com/document.asp?doc_id=1331386&

 

 

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