Smart products and consumer concerns

Over the years, the issues bothering consumers have diversified and multiplied. New technologies have changed the entire life style of the consumers. The recent addition is smart products and devices. Smart products connect to each other and to the internet via different communication connections. They offer consumers the promise of convenience, efficiency and personalised services.

For consumers in developing countries, smart products, particularly smart phones, are a boon. Apart from making calls, these devices can monitor users steps, location and even pulse. Of course, sending, receiving and remitting money has already taken deep roots.

It is estimated that there are currently 23.1 billion connected devices installed globally. By 2025, the figure is expected to increase by three times. Similarly the global spending is forecast to nearly double in all regions between 2017 and 2022.

The use of smart phones has increased rapidly. It is estimated that there are around 4 billion smart phone connections worldwide and by 2025, over 72% of internet users will be accessing the internet exclusively via mobile.

Despite impressive figures, smart products have also raised serious consumer concerns. Rightly, the Consumers International (CI), a global coalition of consumer groups, has chosen ‘Trusted Smart Products’ as this years’ theme for World Consumer Rights Day observed on March 15 every year.

The CI has identified five major issues including safety, privacy, transparency and interoperability relating to smart phones and smart devices to be addressed by the governments, policy makers and the civil society. Smart products are all part of a larger connected systems and networks, and vulnerability in any part can compromise the entire system. Hence safety and security is a priority.

In the wake of the high profile cyberattacks, the CI has called upon the service providers for adherence to the GSMA or the Internet of Things Security Foundation’s security guidelines. In the event of any security breach, providers should notify the consumers to mitigate its impact. Addressing the concerns of vulnerable consumers in relation to safety and security is important. Research by Which?, a consumer body, has shown that several popular children’s toys had serious security flaws.

The toys equipped with speakers and microphones were of particular concern, with no Bluetooth authentication on the toys, hackers were able to connect to the toy, send voice messages to the child and receive answers back.

The CI says that particular care should be taken while designing Consumer Internet of Things (CioT). Accessibility features are to be incorporated. Devices and services designed to minors need to have additional levels of care in relation to security and privacy.

Data privacy and protection is becoming a major issue with smart products. More and more consumers are raising concerns about data privacy. A 2018 global consumer study revealed that 52% of the users are concerned about online privacy compare to one year ago. A study on car models by the ‘Consumer Reports’ has revealed that 32 out of 44 brands of cars offer some kind of wireless data connection. Despite increasing amount of data being collected, the legal rules around who owns the data aren’t very clear.

Closely connected to this is that of transparency. Consumers may understand device functionality but the way in which data is collected and used and hot it relates to a company’s business model is often unclear.

A study by 25 privacy regulators has shown that 59% of devices failed to adequately explain to consumers how their personal information was collected, used and disclosed. The CI has urged the service providers to provide consumers with clear and easy to access information.

The usefulness of smart products depends on how best different products communicate with each other. The service providers and manufacturers should ensure interoperability of smart products.

If devices only operate effectively with others made by the same company, consumers can be locked into one system, thus limiting choice and competition. Moreover, consumers are to be provided with a responsive customer support and complaint handling mechanism. Smart products are also in the news for its possible impact on the environment. It is essential that providers and manufacturers aim at reducing the harmful impact of CioT on the environment.

The gaining popularity of smart products and its wide usage in the day to day lives of the consumers calls for a clear understanding of the issues around security, privacy and transparency. It is essential that the governments develop a comprehensive consumer protection framework that promotes trust among the consumers about smart products.

(The writer is founder trustee, Consumer Rights Education and Awareness Trust, a consumer advocacy group)