What is the FTC Doing About Privacy and Drones?

4 Major Takeaways from Federal Trade Commission FTC October 2016 panel on drones & privacy

Last week, as part of its Fall Technology Series, the Federal Trade Commission (“FTC”) hosted a much-anticipated workshop to explore the privacy concerns associated with drones. Although many in the audience hoped that this workshop would provide some insight into the FTC’s perspective and position on regulation of drones and privacy, the workshop left attendees with more questions than answers. We were there, and provide you with some of the key takeaways.

1. The FTC Didn’t Weigh In About Drones and Privacy.

Although there was some discussion regarding the FTC’s authority to regulate privacy in the context of drones, the FTC was curiously silent. It was not clear, though, why.  It is possible that the FTC is deferring to the Federal Aviation Administration (“FAA”), which recently issued proposed rules regulating drones, but notably omitted to propose any rules regarding privacy.  That failure is currently the subject of litigation challenging by the Electronic Privacy Information Center, which is challenging the sufficiency of the proposed rules because they fail to address privacy.  Presumably, should the FAA’s decision to not address privacy in proposed rules stand, the FTC would have an opportunity to more formally get involved in drone-privacy regulation.

2. Market Players Disagree About Whether Drones Present Unique Privacy Concerns.

 Much of the workshop’s discussion centered upon – and there was significant disagreement as to – whether drones present unique enough concerns to warrant their own body of privacy legislation, or whether existing laws are sufficient to deal with drones. Some panelists argued that drone-based crimes fall within existing stalking and harassment laws, and that new, drone-specific laws would stifle innovation. They also maintained that drone-based data collection is no more invasive than collection through existing technologies (for example, CCTV or online advertising). “Data is data,” stated one panelist. “There shouldn’t be a distinction between the tool[s] you collect that data from.”

Other panelists disagreed, noting that drones can reach places that other devices cannot (as demonstrated in a recent study, where researchers hovered a drone-mounted phone outside an office window and hacked one of the office’s printers), and that current privacy laws would be difficult to enforce against people who pilot drones remotely. New regulations could also help the public become less suspicious of drones; as another panelist explained, “some protections need to be put in place, and that needs to be transparent to the public so they can be more comfortable with drones being integrated into the airspace.”

3. Although Notice and Choice Mechanisms Would Be Beneficial, There Are Significant Implementation Challenges.

Many panelists seemed to believe that the public would benefit from notice and choice regime – that is, mechanisms to help people identify who is operating a particular drone, what data the drone is collecting, and how to opt out of the collection. Proposals to implement notice/choice included prominent display of registration numbers on drones, which would make it easier for the public to pinpoint a drone’s source and purpose and build trust between drone operators and the general public.

However, others disagreed about which situations would warrant notice and choice mechanisms, as well as about the practicality of such mechanisms. Notice and choice requiring every drone to broadcast its registration number and / or the type of data it is collecting could become burdensome and deter innovation.

4. Security is Also a Significant Concern.

 Although the workshop was privacy-oriented, it opened with a drone hacking demonstration, leading to significant discussion regarding data security concerns associated with drones. A few panelists were confident that in the absence of governmental security guidance, private drone manufacturers would simply self-regulate. True to this belief, the workshop’s FTC representatives and industry panelists both described independent measures that drone manufacturers have taken to mitigate network security concerns, including securing their drones’ Wi-Fi networks, encrypting traffic to and from their drones, authenticating drone login information, and using unique drone control signals. “Even in the absence of a regulatory threat,” one panelist argued, “these things will be solved. It may be helpful, but I think not necessary to have that push.” Other panelists were skeptical of relying on self-regulation, but seemed to agree that future innovation would drive drone security developments.

Conclusion

Although the workshop demonstrated how privacy in the context of drones is still in its infancy, what emerged was that this will clearly be an area of focus for regulators, whether the FTC or the FAA. And, unlike with traditional websites and products, privacy and security in the context of drones does present special challenges, similar to those with other Internet of Things (“IoT”) technologies.  Drones manufacturers and users, as well as those who build peripherals for drones, should carefully consider privacy and security issues, and consider a privacy and security by design approach that builds in fair information privacy principles.