The rapidly expanding wearable device market raises serious privacy concerns, as some device makers collect a massive amount of personal data and share it with other companies, according to a new study.
Existing health privacy laws don't generally apply to wearable makers, the study says. While consumers are embracing fitness trackers, smart watches, and smart clothing, a "weak and fragmented" health privacy regulatory system in the U.S. fails to give consumers the privacy protections they may expect, said the study, released Thursday by the Center for Digital Democracy and the School of Communication at American University.
"Many of these devices are already being integrated into a growing Big Data digital health and marketing ecosystem, which is focused on gathering and monetizing personal and health data in order to influence consumer behavior," the study says.
As consumers buy more smart wearables and the devices' functionality becomes increasingly sophisticated "the extent and nature of data collection will be unprecedented," the study adds.
"Americans now face a growing loss of their most sensitive information, as their health data are collected and analyzed on a continuous basis, combined with information about their finances, ethnicity, location, and online and off-line behaviors," said Jeff Chester, CDD's executive director and co-author of the report. "Policy makers must act decisively to protect consumers in today's big data era."
In the U.S., privacy law is piecemeal, with separate laws for different types of information, such as financial, student, or health data, the study notes. U.S. privacy laws governing health information are "limited and fragmented, with significant gaps in coverage," the study says. "The degree to which users of wearable devices will be able to make informed privacy decisions ... will ultimately depend on the effectiveness of government and self-regulatory policies."
While wearable users may believe health information collected by the devices are protected by the U.S. Health Insurance Portability and Accountability Act (HIPAA), that's not the case, Chester said by email.
HIPAA applies only to so-called covered entities, basically health-care providers like doctors and hospitals, he said. "These consumer wearable devices aren’t covered by HIPAA and the marketing that goes on has no protections," Chester added.
In a June report, the U.S. Department of Health and Human Services noted that "health information is increasingly collected, shared, or used by new types of organizations beyond the traditional health care organizations" covered by HIPAA.
A spokeswoman for fitness tracker maker Fitbit noted the company has worked with privacy group the Center for Democracy and Technology to define privacy best practices for wearables. The company believes users should control their data, she said.
"Fitbit is committed to protecting the privacy of our users' data and the trust of our customers is paramount," Fitbit said in a statement. "It has always been our policy not to sell user data."
Wearable maker Apple didn't immediately respond to a request for comment on the report.
The authors of the study called for new privacy standards applied to big data information collection. Companies collecting health and other personal data should be more transparent about their collection and use of data, and the U.S. should consider a new data-protection authority to replace the country's fragmented privacy protections, the study's authors said.
"While we need to do everything possible to educate and empower consumers to take control of their personal data, we cannot expect individuals to bear the entire burden of managing their privacy ini the big-data era," the study says.