FTC Ponies Up $25,000 in Contest to Solve Internet of Things Security

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Like most technological wonders, the Internet of Things has proliferated faster than protections and standards for privacy and security related to connected IoT devices have. The Federal Trade Commission hopes the promise of a rare $25,000 cash prize will incentivize inventors to develop a solution suitable for the privacy and security needs created by the array of IoT gadgets and products people are collecting, items that if not protected leave countless new entranceways for hackers.

"We're doing this to stimulate the market," said Ruth Yodaiken, senior attorney in the FTC's Division of Privacy and Identity Protection, Bureau of Consumer Protection.

Internet-connected smart home devices contain lots of potentially sensitive data, as recent news about conversations recorded by an Amazon Alexa device possibly being used as evidence in a murder case shows. Meanwhile, more and more everyday product packages and labels can connect to the internet, and the digital advertising industry is gearing up to turn IoT devices into cutting-edge ad inventory. All of these IoT data avenues are prone to security sinkholes.

According to Ms. Yodaiken, while some connected devices such as smart thermostats might have built-in security mechanisms and regular updates from manufacturers, she argued that many connected things people have in their homes -- toys, watches, even clothing -- do not. In such cases in which the consumer has no real relationship with the manufacturer, "There's no way to get an update to the consumer if anybody is even monitoring the vulnerabilities."

Security updates typically require awareness by consumers who, as Ms. Yodaiken put it, "have fatigue from security notices."

Recently, prosecutors in Arkansas have pressured Amazon to provide data associated with an Alexa device that may have recorded conversations containing clues to a murder case. But other IoT devices contain far more mundane data and can serve as spots susceptible to hackers, just like phones and desktop and laptop computers are.

The digital ad industry aims for IoT devices to contain ads, potentially creating more sharing of data related to where IoT devices are, and how they are used. The Interactive Advertising Bureau surveyed consumers for a recent study about IoT devices and found that 62% of people who own such products have already seen an ad on one.

The FTC's IoT Home Inspector Challenge contest will award $25,000 for the best technical solution to protect consumers from security breaches in IoT device software. There will also be up to $3,000 available for up to three honorable mention winners.

"An ideal tool might be a physical device that the consumer can add to his or her home network that would check and install updates for other IoT devices on that home network, or it might be an app or cloud-based service, or a dashboard or other user interface," the agency said in a statement.

There are IoT security devices on the market currently. For example, Bitdefender offers a hardware device called Box that secures computers, tablets and smart devices connected to a home network. However, Ms. Yodaiken said that generally speaking, "The problem is not solved." She added, "We have this ability to offer some cash for some smart people to fix that."

Contest submissions will be accepted between March 1 and May 22, and winners, to be judged by a panel of five experts, will be announced in late July.