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Google's Acquisition Of Nest And Your Privacy

Jan 13 2014, 8:41pm CST | by

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Google's Acquisition Of Nest And Your Privacy
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Google's Acquisition Of Nest And Your Privacy

When Matt Rogers, co-founder of connected home devices maker Nest, tweeted a picture of himself with Larry Page after the company’s acquisition by Google for $3.2 billion, two responses stood out from the congratulatory tweets that followed his picture.

Big day today!

— Matt Rogers (@nestmatt) January 13, 2014

The first response, from a photographer in Portland, Oregon, stated that he was glad he hadn’t installed Nest. The second response, from a writer in Illinois, suggested that the picture looked (even) more evil now (I assume he was referring to Google’s motto: Don’t be evil). The responses could be dismissed as Twitter trolls. However, they highlight the larger privacy question for most Internet of Things (or, IoT) products.

The acquisition is the largest such deal in the IoT space and is excellent news for entrepreneurs because it provides further impetus to the mainstreaming of a nascent industry. Both companies complement each other: Nest has the product chops and Google has the marketing and business savvy. It also moves the tech industry’s focus away from social to contextual. As those tweets highlighted, however, that era is marked by important questions related to privacy.

This is because the Internet of Things relies on personal data to provide services. Unlike websites and mobile services, however, data is not restricted to online movement. Instead, Nest’s sensors track movement around the home to provide optimal services and temperature control. In Nests’ case, however, the goal is to improve a product which has already garnered several awards. Thus, data collected by Nest is not shared with advertisers or other services.

Google’s business model, which relies heavily on data collection to build a personal ecosystem of services for users, inverts that model by sharing it across Google’s services.

More Questions Than Answers

According to Parker Higgins, an activist with the Electronic Frontier Foundation, the acquisition provides very few answers to the privacy question. “A lot of people are made uneasy because they entered an agreement (to share their personally identifiable stream of data) with one company (Nest) but now that agreement has been transferred to another company (Google),” he says.

Considering Google’s history of sharing information with advertisers and the government, Nest users have reasons to feel discomfited. However, data sharing is part of the new business equation that consumers have with technology companies such as Google and Facebook.

As I mentioned earlier, Nest was already involved in data collection to iterate and improve its products and services. Immediately after the acquisition, the startup posted an FAQ which repeated the claim. But, Higgins says the sentence following the original statement – We have always taken privacy seriously and this will not change – is cause for worry. “Technology companies have a history of putting out carefully-worded statements and then figuring out a way to do what they want to do,” he says.

In this case, it is the combination of data sets  (Google plus Nest) that ruffles privacy activists’ feathers. “Several privacy questions are raised especially when you combination Nests’ data with Google’s communication data,” explains Higgins. For example, Nest contains motion sensors to detect movement within a home. Using these sensors, it can predict, with reasonable accuracy, which room you are in while at home. Google can easily combine this data set with other services to gain an even more complete picture of your movements. As an example, Higgins says it would be relatively easy for Google to know that you left home after receiving an email from your girlfriend.

An Unregulated Industry

The Federal Trade Commission has, so far, resisted regulation of the Internet of Things to avoid stifling innovation in the industry. But, Higgins says that might change given that the FTC agenda is determined by news stories. “I wouldn’t be surprised if this acquisition caused them to look closer at IoT products,” he says. However, the contours of future regulatory practices in the industry are still unclear given the unique nature (a combination of hardware and software) of the industry. In the past, website model rules (for tracking cookies) were applied for smartphone apps that collected data. “You can imagine something similar except that this industry is qualitatively different,” he says.

Source: Forbes


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