EU Takes on Data Security as ‘Smart’ Products Proliferate

The proliferation of smart computing devices is spurring regulators to consider introducing new legislation aimed at protecting consumer data, in a development that has significant implications for OEMs, component vendors, and software application developers.

The European Union is leading the latest charge to keep private data generated by consumers using social networking sites, smartphones, tablet computers, e-reader devices, and other products from prying eyes. Some of the legislation being considered is likely to affect not just how service providers operate; it could also involve setting standards for hardware design. It's possible regulators may even consider asking OEMs to hardwire data protection software into components, early in the production cycle.

One company that seems to have anticipated such a move, or at least plans to benefit from it, is {complink 2657|Intel Corp.}, which initially had many people puzzled with its $7.7 billion purchase of security application vendor {complink 3313|McAfee Inc.}. The transaction closed in February, and Intel says it expects to announce the first set of products from the transaction later this year. It says the products would focus on “tackling security and the pervasive nature of computing threats in an entirely new way.”

Renée James, Intel senior vice president and general manager, noted, in a statement, how important security applications have become as smartphone and mobile computing technologies have accelerated the use and acceptance of non-cash business transactions. “In the past, energy-efficient performance and Internet connectivity have defined computing requirements,” James said. “Intel has added security as a third pillar of what people demand from their experiences with personal computers and other connected devices. Security challenges put the future potential of computing at risk.”

EBN's Barcelona-based contributor Jennifer Baljko has also noted the trend. Based on comments from readers, it's certain that OEMs, parts vendors, telecom service providers, and retailers can expect some kickback from consumers hesitant to embrace technologies such as near-field communications (NFC) — which facilitate phone and tablet-based commercial transactions — until security concerns have been resolved. (See: Cellphone Payments: High-Tech’s New Frontier) and (Winning People Over to Cellphone-Based Payment).

While technologies like NFC have been fairly well-received in some countries, including Japan, major concerns persist within the regulatory community and among consumers about how companies will manage, use, and protect the data provided by users, according to {complink 9171|Frost & Sullivan} in a research report. In response, the EU has been updating privacy rules because the old regulations do not cover recent technology developments.

“While laws that were originally laid out in 1995 are still enforced, they have been expanded to oversee the growing disclosure of personal data over the internet and through information and communication technology,” says Sharon Hoeck, research analyst for Frost & Sullivan’s ICT group.

The EU has been educating the public on how social networking sites like {complink 10867|Facebook} and {complink 9664|MySpace}, which also act as data aggregators, use personal information generated by consumers on their Websites. Often, users of these sites are not aware that their information, which they may believe was being shared only with trusted friends, could be mined by the Website operators and sold to marketers, or used for other undefined and undisclosed purposes.

Frost & Sullivan concluded:

    As the number of people who own smartphones and mobile devices has increased, the need for further modification of data protection legislation has become clear. Users are often not informed of the way in which their data will be handled and are not given the opportunity to opt-out of the collection of data such as phone location. When considered in the context of past EU legislation, companies that use mobile data should anticipate future legislation by the EU to close this loophole and regulate the sharing of data between mobile providers and mobile application developers.

I believe hardware vendors should go beyond this, though, by borrowing a leaf from Intel to prepare for more restrictive legislation that could adversely affect their operations. It's clear that new legislation will be enacted to regulate how data is captured, stored, and used by commercial entities. The equipment vendors that can anticipate these trends, and have the tools in place to facilitate compliance by service providers, are more likely to win coveted sales than vendors unprepared for these non-hardware related challenges.

9 comments on “EU Takes on Data Security as ‘Smart’ Products Proliferate

  1. Eldredge
    March 9, 2011

    In view of the technology, Intels' acquisition of McAfee seems like a logical move. It seems like it would be to their benefit to market the security aspects on the technology that they develop, as a means of reassuring the consumer, and acquiring market share.

  2. eemom
    March 9, 2011

    I for one am very glad to see Data Security start to be taken more seriously.  There is so much that we all do on the web via many different hardware options that having some kind of standard security measures have become critical.

    Outside of (and more important than) protecting our own personal and financial information, we need to protect our children.  At younger ages, children are now equipped with mobile phones, iTouches, computers, etc.  It is nearly impossible for the parent to monitor 100% of the activity so knowing that security is “hard wired” into the device takes just a little of the pressure off.  Children's activities will always need to be monitored, however, having the technology assist in the monitoring process is a huge help.

  3. Eldredge
    March 9, 2011

    You make an excellent point regarding security involving technology that children (and teenagers / young adults) are using. Many who have grown up with technology at their fingertips are more than a little naive with the information they are wiling to openly provide. HW and/or SW apps that protect our children would be greatly appreciated.

  4. Barbara Jorgensen
    March 9, 2011

    Intel didn't get to where it is today by being backward-looking. In context, McAfee looks like a brilliant move. The more transparent an OEM can make security, the easier it will be to sell the concept (and products). Too much programming or downloading too many apps will make security a chore rather than a necessity.

  5. eemom
    March 9, 2011

    You can't really appreciate the need for security until you've had a teen and pre-teen that have had the technology world at their fingertips from a very young age.  I find that no matter how many things I take away and how many lectures I give, they still feel that they know more and that they are not vulnerable to predators.  I joked around the other day that I play mother, friend, companion not to mention private investigator, police, judge and jury.  It's a lot of roles for one person!!!

  6. Eldredge
    March 9, 2011

    You're right. Implemented successfully, they can market a product that is secure and non-intrusive to the consumer.

  7. Hardcore
    March 9, 2011

    Is Software the way to go?

    I was actually a bit surprised that Intel purchased McAfee, Intel is more of a hardware company, but there you go.

    Personally I cannot see   protection that is implemented in the software stack  of a 'plug in product  actually providing  that must of a protection mechanism.

    There are far more interesting ways of identifying people, that just getting them to enter information into a website( this is an area that Google excel at)


    Consider the situation of wireless routers, if you know where a router is and you can use the device to identify the router, then you know where the device is!!

    This is not actually allowing the device to log into the services available, but rather leveraging the Meta-data that is available.

    Consider when you power up your note book and you see all the 'locked out'  WI-FI devices.

    (those devices also see you).

    You may not be able to form a connection, but any application that 'sees' those available networks, can triangulate your location.

    This works for any number of technologies, something that some advertisers are leveraging by having product technology that can 'scan' an area around an advertising hotspot.

    No amount of 'Mcafee' or other software, can prevent these devices seeing you, and there in lies a key issue, no matter how well you try to obusificate your location there are other devices and technology that are outside of your control, but still providing information to interested parties.

    In some cases this is built into the hardware and cannot easily be disabled because it operates at a level that is sometimes even below the device operating system, and as such cannot be detected by software that sits above that point, furthermore the irony of this , is that some companies 'Google' are producing technology (Android) that makes their job easier, and all under the 'guise of being 'Not being Evil'






  8. Wale Bakare
    March 10, 2011


    I quite agree with you to an extent. With rise and rise in market of smartthings proactive approach needs to be taken to reduce the security threats.

    Actually, information communication technology security challenge remains very much unaddressed despite much efforts being carried out with most research institutions around the world

    In actual fact, joint efforts from both the high-tech companies and Government agencies will go some steps further in reducing the much security concern in ICT world.

    Intel's acquisition of software security giant McAfee is a good deal. Well shall see whether a more enhanced sophiscated firmware security product than just existing McAfee products. What measures would other OEMs take to contribute their quotas to this?



  9. mfbertozzi
    March 14, 2011

    @Bakare, @ HC: thx for your posts I agree on your opinions; going further about concerns on security I was analyzing some data regards issues trend on hw and on sw. During that I watched as news “Ministry of Justice Britain- Home Office and Metropolitan Police- lose almost 200 laptops and smartphones in two years”…Electronics lost seems one of the most important issues on security…

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