As the Internet of Things rapidly expands, marketers are looking for new and creative ways to harness the technology to their clients’ advantage. So whether you think it’s a good idea for your ad to trigger smart home devices like Google Home or Amazon Alexa, or an experiential event where wearables are provided to fans, this presentation will detail the legal and business challenges that marketers face in this dynamically changing landscape. This presentation by Vejay Lalla, an attorney who specializes in the legal complexities of digital media, will provide an overview of the privacy, intellectual property and native advertising that need to be considered when tapping into the Internet of Things for marketing.

1. Presentation to
MediaPost IoT Marketing Forum
INTERNET OF THINGS
LEGAL CONSIDERATIONS
Thursday, May 18, 2017
Vejay G. Lalla
Partner
Digital Media, Technology &
Privacy
212.468.4975
vlalla@dglaw.com
© 2017 Davis & Gilbert LLP

2. 2
» Home Assistants
» Basic Legal Principles – The FTC
» Wearables
- Shopper Marketing
- Event / Experiental
• Spotlight on IoT and Kids – COPPA Issues
» Native Advertising
AGENDA

4. Title of Presentation Here4

5. HOME ASSISTANTS

8. Hot Topics8
TECHNOLOGY SOLUTION

9. 9
TYPICAL LEGAL ISSUES
» API – a contract between tech provider and user/developer
- Would generally contain terms controlling how/when technology
can be used by third parties
» Trademarks
- Ad spokesman says “OK Google…”
» False Endorsement
- Ad creates implicit connection between Burger King and Google
» Google avoided all of these issues with tech, not legal, solution…

10. BASIC LEGAL PRINCIPLES –
THE FTC

11. 11
TRACKING BEYOND THE WEB –
“THE INTERNET OF THINGS”
» FTC held a public workshop in November 2013 to explore
consumer privacy and security issues posed by the growing
connectivity of devices
» The workshop focused on consumer data collected both
- When consumers are on the move (including health and fitness
devices, personal devices, and cars)
- When in the home (including home automation, smart home
appliances and connected devices)

13. FTC REPORT (JANUARY 2015)
» Internet of Things – Privacy and Security in a Connected World
- Security by Design
- Train employees about good
security
- Retain service providers
capable of maintaining
reasonable security
- Monitor products throughout
lifecycle
- Data minimization
- Notice & Choice – “Staff
acknowledges the practical
difficulty of providing choice
when there is no consumer
interface and recognizes that
there is no one-size-fits-all
approach”
- Legislation pre-mature, but
self-regulation helpful

14. FTC – IN THE MATTER OF TRENDNET, INC.
(SEPTEMBER, 2013)
» Data Security is a primary concern
» Internet-connected baby monitors promised secure feed, was easily hacked
» FTC: “lax security practices exposed the private lives of hundreds of
consumers to public viewing on the Internet.”
- Also found that advertising for product had misrepresented security
capabilities
» TRENDnet had to overhaul security practices, obtain third party assessments
of security compliance for 20 years.
- Prohibited from misrepresenting security program going forward

15. WEARABLES

16. 16
WHAT TO LOOK FOR IN 2017: RISE AND ADOPTION
OF NEW TECHNOLOGY TO COLLECT DATA
» Cutting edge technology
» Beacons to track where
shoppers are in the store
» RFID (Radio-Frequency
Identification)
» Wearables
» Facial recognition software
- Identify repeat shoppers
» Heat maps
- Show where people walked
- How long they stood at each
place

19. 19
HOW IS IT BEING DELIVERED?
» Hyper-targeted communications to shoppers in real time
- “Right-place-right-time” coupons and special offers
- Shopper is targeted with a discount while standing in the aisle
• E.g., Sunscreen brand’s mobile shopping app
- Identifies shoppers in the sunscreen aisle and pushes a UV
forecast for the next couple of days to their phone

20. 20
HOW IS IT BEING ANALYZED AND USED?
» People walk around a store with their mobile device in their hand
» Mobile apps create omnichannel marketing research opportunities
- Online activity and online shopping with physical data form in-store
- What if behavioral targeting is involved?

22. Hot Topics22

23. 23
SOPHISTICATED INSIGHTS AND MODELS
ABOUT SHOPPERS’ ACTIVITIES
» Which endcaps were most popular?
» Which customers visited multiple locations?
» How long did customers tend to linger in Aisle 6?
» Which products did customers pick up and inspect
» Which products were put back, and which placed in the cart?

24. [Presentation Title Goes Here – Type it in the Master Slide]24
Notice
Choice
Consent

25. FTC – IN THE MATTER OF NOMI
TECHNOLOGIES, INC. (APRIL 2015)
» In-store beacon technology
» Nomi Privacy Policy – “Nomi pledges to ... Always allow consumers to opt
out of Nomi’s service on its website as well as at any retailer using Nomi’s
technology.”
» FTC – “It’s vital that companies keep their privacy promises to consumers
when working with emerging technologies, just as it is in any other context.
If you tell a consumer that they will have choices about their privacy, you
should make sure all of those choices are actually available to them”

26. LEGAL ISSUES WITH SHOPPER MARKETING
CONNECTED ITEMS
- Security by Design
- Are security features built in
from inception?
- Data minimization
- What are you collecting?
How long are you keeping
it? What do you really use it
for?
- Notice & Choice
- Do shoppers know what is
being collected?
- When are they receiving
notice?
- Do shoppers know what
data is used for?
- What is opt-out/opt-in
policy?

27. Hot Topics in Privacy and Date Security Law27

28. 28
LOCATION SPECIFIC WEARABLES:
HURDL WRISTBANDS
» Provided for individual events, light up different colors
» Users activate by texting individual code, must agree to text message
delivered privacy policy
» Users answer questions like
- “Are you a Single Lady” and then would light up at a Beyonce concert
- “Do you know someone on autism spectrum?” for an autism fundraiser
» After event ends, companies can still contact users via text or mobile app
» Ensure privacy policy allows for all types of data collection and use
contemplated

29. 29
» Beware – still must abide by FTC’s requirements, including “Data
Minimization” principle
» Privacy: What other ways are you using the answers to Hurdl questions?
- Are those uses compliant with privacy policy?
» How long are you keeping that data?
» Remember In Re Nomi Technologies
- FTC – “It’s vital that companies keep their privacy promises to
consumers …”
» Security: Is customer data stored safely?
LEGAL ISSUES WITH LOCATION SPECIFIC
WEARABLES: HURDL WRISTBANDS

30. SPOTLIGHT ON IoT AND KIDS –
COPPA

31. Hot Topics31
LINK TO DISNEY MYMAGIC VIDEO

32. CHILDREN’S ONLINE PRIVACY PROTECTION ACT
– COPPA
» Applies to online services and mobile applications which are
“directed to children”
» “Children” means under age 13
» “Directed to children” depends on
- Subject matter
- Visual content
- Use of animated characters, child oriented activities, presence
of child celebrities, similar appearance to a cartoon, and more
32

33. COPPA REQUIRES PARENTAL CONSENT
» Must obtain “verifiable parental consent” before collecting, using
or disclosing “Personal Information” from children
- Parent saying “I agree” to home assistant probably isn’t
verifiable, need stronger consent like email
» Use of Personal Information for behavioral advertising, profile
building, or any other purpose not stated in the law is prohibited
33

34. 34
COPPA PERSONAL INFORMATION
» Personal Information under COPPA
- Name, address, telephone number, email, SSN
- Screen name or user name where it functions as online contact info
- Persistent identifier (cookie, IP address, device serial #)
- A stored photo, video or audio file where such file contains a child’s
image or voice
- Geolocation data to ID street name or name of city / town

35. 35
COPPA AND WEARABLES
» Disney MagicBand – needs parental consent for COPPA
- Persistent identifier
- Geolocation data

36. NATIVE ADVERTISING

38. WHAT IS NATIVE ADVERTISING?
» Advertising content that is integrated into editorial content and / or
takes on the aesthetic, look and feel of surrounding editorial
content to target certain user demographics
» This kind of content is treated as advertising and is subject to the
same legal and regulatory concerns as traditional advertising
38

39. MAKING DISCLOSURES BASED ON
THE FTC GUIDANCE
» In general, disclosures should be
- In clear and unambiguous language (logos alone are not
sufficient)
- As close as possible to the native ads to which they relate
- For video ads, on the screen long enough to be noticed, read,
and understood
- For audio disclosures, read at a cadence that’s easy for
consumers to follow and in words consumers will understand
39

40. NATIVE ADVERTISING – KEY TAKEAWAYS
» FTC will view native advertising similarly to any other advertising
and will enforce key principles of transparency and disclosure
going forward
» Also be wary of traditional IP / publicity issues in native content
» Need to determine appropriate type and placement of native
advertising disclosures
40

41. QUESTIONS
Vejay G. Lalla
Partner
Digital Media, Technology &
Privacy
212.468.4975
vlalla@dglaw.com
© 2017 Davis & Gilbert LLP