The Internet of Things (IoT) is coming and perhaps the first place we will see the proverbial rubber hit the road is with something near and dear to Americans – our cars. The ever increasing connectivity of cars is creating a multitude of new security concerns and legal issues. The security concerns that arise from connected cars will not be unique to automobiles, and there are lessons to be learned for a variety of industries, including manufacturing.

On February 9, 2015, U.S. Senator Ed Markey (D-Mass.) released a report on automobile security and privacy vulnerabilities, Tracking & Hacking: Security & Privacy Gaps Put American Drivers at Risk. Key findings from the Report reveal an inconsistent patchwork of security measures across all automobiles including: inability to respond to, or even diagnose, hacking or real-time infiltration; unsecured or unencrypted transmission and storage of data; and, questionable use and sharing of that data. Many of these same concerns are being voiced elsewhere, including by the Federal Trade Commission.

The recipe for a problem is simple. Vehicles contain a multitude of computers collecting data, from driving habits to location data to media or entertainment use. Many now come equipped with cellular chips to create traveling Wi-Fi hotspots much like today’s smartphones. However, those chips are also used to send data collected by the vehicle’s computers to a manufacturer or third-party, as well as to receive data for modification of a vehicle’s computers – and in turn, its operation. In addition to privacy concerns, these technologies potentially allow hackers to remotely access a vehicle’s control systems. These facts are not unique to vehicles. From the connected refrigerator to the connected traffic light, the recipe is the same: a device, running software, capable of collecting and receiving data, and that can connect to the internet.

This recipe begs several questions highlighted by the recent reports. Is a manufacturer aware of or able to identify hacking incidents? Even if it can identify an incident, what are a manufacturer’s capabilities to stop it? When a software vulnerability is identified – and one eventually will be – what are the capabilities for patching it? This is not just a question of engineering, but a practical concern that must take into account consumers. Many of us have a hard enough time keeping our computer or web browser up-to-date with the latest security patch. Do we truly expect everyone to be any more responsive if we also have to keep updating software for our car, refrigerator, washer, dryer, stove, door locks, garage door, thermostat, smoke detector, watch, smart light bulbs, and other items? If there is a device running software and it is connected to the internet, that brings with it a lifetime commitment of battling security holes. This will require a paradigm shift in digital maintenance and upkeep that is already a struggle for consumers. The way this shakes out will be an organic confluence of consumer sentiment, manufacturing smarts, and the continual shifting line between the costs and benefits of smarter things.

Moving beyond security of the device are questions related to security of the data. Tracking & Hacking reveals inconsistent efforts to ensure that any data collected and transmitted is in fact secure. Manufacturers too often fail to take the first and most fundamental step in protecting data:  encrypt it. Encrypt it everywhere. Encrypt it locally on the device, encrypt it during transmission, and encrypt it while sitting on a remote server. Whether it is data critical to the functioning of vehicle brakes, or simply data about a refrigerator’s internal temperature, encrypting data is the first step to ensuring that one small software hole does not end up handing over the keys to the kingdom.

Finally, even if collected data is secure, manufacturers are still left with an increasingly public debate over privacy concerns related to that data. What is done with it? Who sees it? Did the consumer consent to the use or sharing of this data and how informed was that consent? Who even owns that data? Is data generated by my habits or actions owned by me?

Fortunately, manufacturers now have valuable guidance for designing privacy and security into their devices, according to Foley & Lardner’s legal report, Is Your Refrigerator Spying on You?  The guidance comes from the FTC’s recent report, Internet of Things (IoT) – Privacy & Security in a Connected World.

Tracking & Hacking is not the only recent report to raise several of these questions and find many of the answers from manufacturers wanting. On February 10, 2015, HP released a report analyzing the top 10 most common Internet of Things devices, with similarly concerning results regarding security. While vehicles may be one of the first industries subjected to this level of scrutiny over the Internet of Things, it will not be the last industry. All companies should review the report, consider the questions posed, and ask: what are our answers for our connected device? Whether it is a United States Senator, your customers, or an attorney with a subpoena in-hand, someone will be asking these questions and companies must be prepared to answer them.