cra-data-security-2The Office of the Privacy Commissioner of Canada (“OPC”) last week published a new research paper on the Internet of Things1. The paper focuses, in particular, on issues of privacy and security in retail and home environments.

The Internet of Things is the generic description given to the ability of everyday objects to connect to the internet and/or communicate with other devices or objects. For example, radio-frequency identification (RFID) chips imbedded into goods or objects permits real-time tracking of the objects to which they are attached. Devices and/or objects can also transfer small amounts of data quickly and imperceptibly through near-field communications (NFC) or communicate directly with each other or larger systems.

While interconnected devices and systems are not new, technological advancements such as smartphones and the development of low-cost sensors and wireless networks, have significantly increased the ability to monitor, gather, and communicate information about the devices themselves and their environment. It is possible to gather extensive data about the habits and patterns of individuals based on the uniquely identified mobile devices they carry with them. The amount of data as well as its quality and precision will increase in the future.

The OPC cites forecasts which predict exponential growth: for example, ABI Research predicts that the number of connected devices will increase from 10 billion to 30 billion by 2020, while Cisco Systems forecasts that there will be 50 billion devices connected by that same year.

Internet of Things in the Retail Sector

The prevalence of smartphones and other connected devices in conjunction with the spread of wireless hotspots, Bluetooth, and other networks in public spaces has dramatically increased the amount of information which can be gathered both visibly, such as through smartphone applications associated with loyalty programs, and invisibly, such as data gathered from interactions with a device’s radio interfaces (i.e. Bluetooth or WiFi). Retailers can use this data to improve efficiency, through better inventory management and store layouts, or to direct promotions to customers who are in and around their store.

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