What do fitness trackers, home assistance devices, health monitors and smart televisions have in common? They are part of the ‘Internet of Things’, also known as IoT. As a developer of IoT devices, this is a great opportunity for you to develop solutions to improve the convenience the lives of others.

However, a recent international survey has found just 37% of Australian companies could detect an IoT security breach, while only 57% encrypt the data they capture or store in IoT devices. As your customers have become privacy-conscious, you need to reassure your users that you have measures in place to protect the security of your customers’ data. This article explains how your IoT business can prevent security breaches.

Why You Need To Secure Your IoT Device

Your IoT device is a hot target for hackers. For example, if you produce health devices such as a pacemaker, hackers could disrupt its use.  Even businesses are not immune. For example, if you sell an IoT device that measures customer traffic to a retail store, competitors may find a way to steal the data.

Therefore, before you sell any IoT devices on the market, you need to think of security measures to protect your device from data breaches. As customers become increasingly concerned about privacy and data security, you should have security measures in place to reassure your customers and protect your brand.

Key Security Measures


Security Measure Benefit
Include a mandatory password that is updated regularly for your IoT device. A unique password is hard to hack. Users may feel more confident in the device as they can choose their password.
Ensure you update your IoT device with regular software updates, whether online or on the device.  The latest software means the latest security features, which also means the device and related software is better protected.
Encrypt all data which passes through or is stored on the IoT device. Encrypted data is much harder to penetrate than plain text. The hacker must obtain the data and then figure out the password or secret key to unlock the data.
Implement centralised monitoring for your IoT devices and record any security issues. You can how your customers are using your IoT devices and software. Spot any concerning security trends that will help you pinpoint and diagnose problems faster.
Seek advice from an IT security consultant. An IT expert can help assess key security risks of your IoT device. They may be able to create a personal plan that outlines additional security measures to secure your customer data and maintain privacy.


What Legal Documents Do You Need?

On top of practical security measures, you should protect yourself legally from any data privacy risks with your IoT device. 

At a minimum, you will need:

  1. terms and conditions; and
  2. a privacy policy.

Terms and Conditions

Your terms and conditions can specify how your customers can use IoT services to secure the IoT device and software. Your terms and conditions can also specify how you will manage the security of your device. More importantly, your terms and conditions should limit the liability for any data breaches that are caused by the user’s use of IoT devices.

However, even if a data breach does occur, you should set out how you will recover the data. Furthermore, you will have to reassure customers that they should still have confidence in your device.

Privacy Policy

A privacy policy can help reassure users about the security of your IoT device. Your privacy policy should inform your users about how you collect, use, disclose and secure their personal information.

For example, if your IoT device is a smart heart monitor, your privacy policy may want to explain how you will secure their daily log of heart rhythms as they exercise in the gym. 

You will need a privacy policy if you have an annual turnover of $3 million or more. Some exceptions apply, such as if you are a:

  • health service provider;
  • business that buys or sells personal information (such as email lists); or
  • contractor that provides services under a Commonwealth contract.

Even if you do not legally need a privacy policy, having a document in place reassures your customers about how you will secure their data and maintain your privacy.

If you need a privacy policy, you will need to comply with the Mandatory Data Breach Notification Scheme. The scheme sets out rules on how you must report eligible data breaches.

For example, if a hacker breaks into your smart heart monitor and steals your customers’ names and email address, that could be an eligible data breach that you will need to report.

Your business may want to create a data breach response plan that sets out how you will respond to a data breach in your IoT device.

Key Takeaways

As a business that sells IoT devices, you should have a list of security measures in place to reassure customers about the security of your IoT device. In addition, it is a good idea to have terms and conditions as well as a privacy policy to protect yourself legally if there is a data breach. If you have any questions, get in touch with LegalVision’s IT lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Jacqueline Gibson

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