Vendor trust and the Internet of Things

We recently discussed the potential security and privacy issues surrounding the Internet of Things (IoT) - the rapidly growing network of “smart” devices we use that are connected via the Internet. Unfortunately, security and privacy are not necessarily high priorities for many technology companies. They are in a race to develop features that will establish their products over those of their competitors.

But this aren't the only issues with the IoT. There are also the issues of licensing and supply of services, which come down to vendor trust.

Licensing vs ownership

Now many consumers are using Kindles for reading books and iTunes for obtaining music, the ownership lines are blurring. Physical items such as books and CDs can be loaned, sold or passed on to others. But digital goods such as Kindle books and iTunes music cannot be - consumers purchase a license that gives a right to use, not ownership.

For example, Amazon's license agreement for Kindle content grants "a non-exclusive right to view, use, and display such Kindle Content an unlimited number of times". Furthermore, "Kindle Content is licensed, not sold, to you by the Content Provider" ... " you may not sell, rent, lease, distribute, broadcast, sublicense, or otherwise assign any rights to the Kindle Content or any portion of it to any third party".

What's the issue with licensing versus ownership, apart from not being able to pass digital items on to others? When it comes to the Kindle, Amazon has a degree of control over the content you have purchased. In 2009, Amazon remotely deleted some Kindle books from Kindle users who had purchased them. There are also numerous case where Amazon has banned user accounts because they had asked for too many product refunds. If your user account is banned, you may not be able to purchase further Kindle books. In one extreme case, a user had all their previously purchased books deleted. And for customers with Amazon Prime subscriptions, some have lost the balance of their subscription, including their Prime Video access.

It is concerning when large, multinational companies such as Apple and Amazon have such power over the goods we have purchased (well, licensed). Complaints can usually only be made be email, and so a rapid resolution is unlikely in the event of a problem.

Of course, these issues have only affected a tiny minority of customers, and some are likely to have been gaming the system in obtaining refunds.

Supply of services

But as the IoT grows, more and more devices are becoming Internet-enabled - our thermostats, our CC-TV cameras, our TVs and even our vehicles. The software running these devices is also licensed, and not owned. It is often updated automatically. Often, the companies providing these devices can remotely disable them. Often, our devices rely on vendors for updates and services. But what if the vendors are no lonrevolvger willing or able to supply the services?

This happened very recently with Revolv, which sold smart hubs for homes. These hubs could be used to control lighting, alarms and doors. But two years ago, Revolv was acquired by Google subsidiary Nest, and their technology is being integrated into Nest's platform.

Where does that leave Revolv's customers? Nowhere. The founders of Revolv recently announced that "we can’t allocate resources to Revolv anymore and we have to shut down the service. As of May 15, 2016, your Revolv hub and app will no longer work". From May onwards, their smart hubs are worthless junk, or "bricked" - despite purchasing a "lifetime subscription". It is unclear what compensation is being offered - apparently it is on a "case by case" basis.

Revolv's betrayal of their customers shows another significant downside of the IoT, apart from issues of security and privacy. The companies who supply the software and services for devices have unprecedented control over their customers' homes and possessions, and all it takes is a corporate takeover or a bankruptcy for services to be withdrawn. Of course, unscrupulous companies may also take the opportunity to demand ever increasing subscription fees from their helpless users.

Vendor trust

It may take some time for Nest to rebuild the trust destroyed by their treatment of Revolv's customers.

If you are considering Internet-enabling your home, it is certainly worthwhile investigating whether a vendor's Internet service is required for your devices to work, or if your smart hub can function independently of the vendor. This may become an important selling feature in future.

Posted by John Faulds in