Consumer Electronics Show shifts focus toward regulation and 'techlash'

The massive Consumer Electronics Show in Las Vegas, which happens each year on neutral ground between Washington and Silicon Valley, has been a demilitarized zone where tech companies and regulators can rub elbows without rancor.

Members of the US Federal Trade Commission, the Federal Communications Commission and the Department of Commerce — both politically appointed commissioners and influential staffers — have been CES fixtures.

However, the US government shutdown scotched that this year. It deprived regulators of the chance to relay the message at the largest annual tech gathering on the planet that they are watching the industry, and for the tech community to relay the message that government shouldn’t mess too much with the engine of success.

But even with the regulators mostly absent, there were reminders everywhere of just how different the 2019 CES is from last year's show.

In the in the wake of Facebook’s Cambridge Analytica privacy debacle and California’s passage of a sweeping privacy law, the public policy chiefs for both Verizon and Google called for Congress to pass national privacy rules in 2019 — a call that would have been unthinkable a year ago.

"It’s become apparent that our approach to privacy just isn't working,” said Melissa Tye, the head of public policy for Verizon, adding that the company sees privacy and additions to wireless spectrum as two places where Congress could get something done in 2019. Verizon now owns Oath, a subsidiary cobbled together from the remains of what were once two of the world’s most important Internet companies — Yahoo and AOL — and both have had significant regulatory problems recently over data.

Adam Kovacevich, the director of public policy for Google in the US, acknowledged at a session that a “techlash” has erupted against the industry, and that the once-cordial relations between tech and DC are likely gone forever, in part because of events such as Cambridge Analytica.

“The honeymoon is over, but now we’re in the relationship, and the relationship is also” — Kovacevich paused for a beat, before settling on this word — “great.”

But Kovacevich also rehearsed the argument tech companies are certain to make should politicians or regulators seek to use the antitrust laws to break up big tech companies or dramatically rein in their ability to collect and exploit personal data from consumers.

“This is not something you see consumers clamoring for,” Kovacevich said of a potential breakup of companies such as Google, Amazon and Facebook.

“I think we should have a conversation with policymakers about what kind of regulations would solve the problems they are identifying, but we should be mindful that consumers don’t want anything that interferes with their Amazon one-click buying, and they don’t want government bureaucrats dictating their Facebook news feed or their Google search results,” he said.

However, nobody on the panel disagreed that the techlash of the past year is real. The only debate concerned the causes and the correct response.

Privacy ascendant

Nor does anyone need to explain anymore, even to a crowd of coders and entrepreneurs, what the initials “GDPR” stand for. The European Union's General Data Protection Regulation, which took effect last year, aims to protect data privacy and harmonize laws across Europe.

One of the hot technology categories at CES this year was “baby-tech,” a growing category of connected devices such as baby monitors and sensors that can monitor the health of mothers and babies — even before they are born.

One of the hundreds of products unveiled Tuesday at CES was Miku, which bills itself as the world’s most advanced baby monitor. It uses military technology to watch a newborn’s breathing patterns, as well as other biometric and environmental data, and can relay that data via a smartphone app to a parent anywhere on the planet.

But Eric White, founder of the Miku start-up, took the unusual step of building encryption keys for that data into the chip that runs the baby monitor. Such keys are more secure than crypto keys implemented through software. Miku is one of the first Internet of Things products to take that step, White said.

But Miku is well aware of data breaches such as the FTC’s TrendNet case, where weak security on the company’s Internet-connected baby monitors allowed hackers to break into the network and access images and sound connections of actual infants.

“I think transparency is really key,” said Rachel Rothman, chief technologist for “Good Housekeeping” magazine, discussing Miku’s precautions. “It’s apparent that people really want to know where this information is going, and what is being done with it.”

Privacy regulation was an element of the annual “State of the Industry” speech by the head of the Consumer Technology Association, Gary Shapiro, on Tuesday. The tech industry is “currently in a privacy perfect storm,” said Michael Petricone, the head of regulatory affairs for the CTA, which puts on the CES show.

For the first time, CES held a panel today where experts such as former FTC Chairman Maureen Ohlhausen discussed not whether, but when and how, US privacy rules will be passed.

The tech industry must take responsibility for privacy, said one privacy expert.

“We need to shift the burden of privacy,” said Michelle Richardson, director of the privacy and data project for the Center for Democracy and Technology, a Washington think tank. “We no longer can live in a world where individuals have to manage every piece of data and have to foresee every possible use for it.”