Is Your Thermostat Spying On You?

Most people oppose giving up their private data to the NSA. What about giving it to restaurants, or toothpaste makers?

When left home alone, cats spend 22 percent of their time looking out of windows, 8 percent climbing chairs and 6 percent sleeping. A researcher collecting data for a pet manufacturer figured that out by fitting 50 cats with camera collars that took pictures every 15 minutes. That was four years ago. Now the animal testing phase is over: The Internet of Things is about to turn people into the equivalent of those experimental cats, with more sophisticated tracking devices.

Nest, the intelligent device producer Google is acquiring for $3.2 billion, makes thermostats and smoke detectors that interact with owners' smartphones. So is there any reason to worry that the devices will track your movements while you're at home, record your behavioral patterns and share the information with Google, which will then use it for commercial purposes? After all, Google is mainly in the advertising business.

In a Q&A released on the occasion of the deal announcement, Nest said this: "Our privacy policy clearly limits the use of customer information to providing and improving Nest's products and services. We've always taken privacy seriously and this will not change." The real answer is less straightforward: There is no telling what products and services Nest, in partnership with Google, might decide to provide and improve in the future. The company drew Google's attention by reinventing simple devices that had not changed for decades, which is precisely the business opportunity the Internet of Things provides. In a world of 100 trillion sensors, all objects will be transformed into linked devices. Data on their use, and on people's behavior in a multitude of situations, can determine which of the devices will be the biggest sellers.

Whether we want it or not, the data will be collected and used. Companies like Turnstyle Solutions in Toronto are already tracking people's physical movements using signals from their smartphones. Anyone who has Wi-Fi turned on can be tracked doing their daily routines, categorized as a "yoga-goer" or a "hipster" and used, along with others, by merchants to work out which services to offer and when. The company also provides free Wi-Fi in restaurants and bars. To join the network, a customer has to agree to the transfer of some personal data. One Turnstyle client, a restaurant owner, hired a DJ to play '80s music on Fridays after he found out most of his Wi-Fi-using customers were over 30.

That kind of data-gathering is efficient both for the trackers and for their clients on a local scale. Google and companies like Apple and Miscoroft, which produce smartphone software, are able to do similar things globally because most smartphone users are not privacy-conscious enough to disable the geolocation functions on their devices. Even hackers sometimes get disastrously careless with so-called EXIF ("exchangeable image format") metadata -- information bundled with pictures and sound files that reveals, among other things, the location where the files were created.

As more objects -- from toothbrushes to smoke detectors -- interact with smartphones, which increasingly take over as people's primary means of identification, disabling such interaction will become harder and harder, even for those who give it serious throught.

In principle, most people are opposed to giving up their private data to entities such as the National Security Agency, which collect the information from Internet companies. But the degree of opposition depends on how the questions are framed, and in practice people easily give up their privacy for the sake of convenience. Do people connecting to free Wi-Fi networks operated by Turnstyle even read the disclosure form with which they are required to agree? At least some of them do not.

On Tuesday, Ford chief executive Alan Mullally called for a law to regulate the collection and use of personal data by connected devices. "Our homes, the cars, everything is going to be on the Internet," he said. "Everything's going to be connected. And so what are the guidelines? What do we want?" And legislation is indeed forthcoming, with Senator Al Franken saying he would reintroduce a privacy bill he first proposed in 2011. It won't, however, solve the real-world problem, because it will still be as easy for people to sign off automatically on a form as it is now.

It could be argued that if people are so careless about their privacy, that privacy must not be terribly important to them. They may, however, simply fail to realize the dangers -- not direct ones, like being watched by the authorities, but more subtle and existential ones. Targeted advertising and intelligent devices may end up nudging people toward suboptimal lifestyles. That is not something people normally think about when they click "OK," allowing an iPhone app to use location information.

For those concerned about this kind of threat, the only option is to resist the temptation of surrounding themselves with connected devices. An old-school smoke detector may make unpleasant sounds, but it is blissfully dumb. A classic toothbrush may not tell one to increase pressure on certain teeth, but then it is definitely not a spy for toothpaste producers. It is not that hard to stay off the grid: Most of us have managed to do this for decades.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.