As a budding industry, the Internet of Things could create a number of direct security risks for enterprises, but compliance is also an issue that needs addressing. Companies that deploy IoT devices for their own use, or those that have employees bringing them into the office, will find a dearth in documented answers from manufacturers about data collection methods. And the controls needed to keep company and customer data safe can be sparse for some devices. As a compliance issue, the lack of control over the security of IoT devices and the data they collect can come with weighty consequences.

According to Jennifer Tharp, a security compliance analyst at OpenDNS, the world of compliance can be a labyrinthine of rules and guidelines, and regulations vary widely depending on the country. For companies looking to break out of a domestic market, it can be difficult to know all the regulations involved, and not knowing can have some pretty weighty consequences. Given that most Internet of Things devices do not disclose where they send collected data, let alone what data is collected in the first place, IoT is also bound to make compliance management even more difficult.

In January 2015 the FTC released an Internet of Things report that lists suggestions for companies both creating and using devices. In it, the FTC lays out 55-pages worth of introductory definitions of IoT, regulatory suggestions, and best practices for security. The problem is, most device manufacturers are not following the suggestions made in the report. And some of the report’s suggested safety measures are currently not possible, such as auditing data collection and privacy.

“[Compliance] is complicated,” Tharp said, referring to the compliance rules of some countries that forbid collected personal data to be transported outside the country. IoT devices, as noted in OpenDNS’s Internet of Things in the Enterprise report, send collected data to any number of countries, often without end users’ consent or knowledge.

“The purpose of any compliance framework is to prove you are trustable,” Tharp said. “These [laws and regulations] are coming up at a time when we are more connected than ever.” Proving that a company has a handle on all consumer data and where it goes can be incredibly difficult, especially if IoT devices are present.

The FTC report focuses a good amount on proposed disclosure and consent measures for consumers using devices. Mainly, the commission would like manufacturers to allow device users the ability to opt out of unnecessary collection, and a disclosure of what data is being collected and where it goes.

According to the OpenDNS Research team, documentation for data collection and handling largely does not exist, which is troubling for both consumers using the devices and companies trying to secure them.

“When we first started to look at the popular IoT devices that people use, we found the actual documentation to be really sparse,” said OpenDNS Director of Research Andrew Hay. “They didn’t tell you what networks or domains to allow and there was often no information about networking at all beyond ‘make sure this device can talk to the Internet using HTTP or HTTPS.’ This goes against what security people have been taught, in terms of locking down communications for any device on the network.”

As for compliance consequences, Tharp says they can vary widely. Germany, for example, has some pretty extreme fines for misuse of consumer data. Data protection violations can bring fines as high as 300,000 euros. “Some companies also say they won’t do business with a company that’s not compliant,” Tharp said. “But companies often say one thing and do another.”

As for IoT makers, the FTC’s report also suggests building security into the product instead making it an afterthought. FTC Commissioner Julie Brill says this development philosophy should be fundamental as what she terms the “three V’s”–variety, velocity, and volume–of data collection begins to reach ever higher levels. She mentioned in an interview with NextGov.org that a developing focus for the FTC has been to get companies to consider “privacy by design.”

“That is, let’s not place so much of a burden on consumers,” she said. “Let’s have companies really think through the data practices that they have. Do they really need to collect all of that data? And if they do, how can they protect it or ensure that a consumer’s privacy is appropriately handled?”

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