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The Internet of Things (IoT) -- where sensors built into domestic appliances, the buildings we live in, the clothes we wear, or the gadgets we carry communicate and share data online -- is seen by many tech companies as the next great evolution of the internet.

By placing sensors on everyday objects we can better measure the world around us, fix machines before they break, create vastly more efficient services, and even understand our own health better. As such, billions of dollars are being poured into researching the field, and we could be surrounded with as many as 50 billion connected objects online within five years.

But there is also a risk inherent in the IoT: we risk building a new network that will commodify another huge chunk of human experience -- gather it up, scrutinise it, slice it and dice it, and sell it back to us. In this version of the IoT, the 'things' are you and me.

This is less an issue in the industrial IoT, which involves adding sensors to pipelines or machinery, and doesn't have the same implications for society. The risk affects the everyday consumer version, which is only just emerging.

The all-seeing IoT

Edith Ramirez, chairwoman of the US Federal Trade Commission, warned the tech industry about the risk of exactly this at the CES show in Las Vegas last month. Ramirez noted that smart TV and tablets could track whether you watch the history channel or reality television, and asked whether this would mean your TV viewing habits could go on to be shared with prospective employers or universities.

"Will they be shared with data brokers, who will put those nuggets together with information collected by your parking lot security gate, your heart monitor, and your smartphone? And will this information be used to paint a picture of you that you will not see but that others will -- people who might make decisions about whether you are shown ads for organic food or junk food, where your call to customer service is routed, and what offers of credit and other products you receive?"

It's a system that not only risks turning your daily life into a series of data points, but one that could actually reinforce or even widen the divisions in society today, warned Ramirez: "And, as businesses use the vast troves of data generated by connected devices to segment consumers to determine what products are marketed to them, the prices they are charged, and the level of customer service they receive, will it exacerbate existing socioeconomic disparities?"

Similarly, the UK's data watchdog has started looking into the IoT: "The IoT will be formed of a vast range of devices, many of which will not have the keyboards and screens that users are familiar with from their other communications devices. Users might, therefore, not know that their data is being collected, shared and processed, and may find it harder to make an informed choice about whether to share their data," the Information Commissioner's Office said.

Toiling in the factory without walls

'If you're not paying for it then you're the product' is a dark joke that has long been the truth about our online interactions: pretty much every page you visit, every click, is analysed and monetised, filtered and repackaged to better target you with advertising.

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Academics have coined terms like 'social labour', 'incidental productivity' and 'ambient production' to cover the way we generate data using social networks and the like, because this sort of behaviour is far from the forms of work which have existed before: a 'factory without walls' is grimmer term that has also been used.

Still, we've been able to rationalise the trend, or at least forget about that online exchange, to a great extent. Partly that's because bartering our personal information for access -- to search, or email, or social networks -- was built in from the start, and because it was relatively easy to ignore.

It was also easy to ignore because that digital experience is easy to separate from our 'real' lives: you may well have different online identities depending on the time of day, device or account you are using, making it relatively hard to stitch those together into a full picture of our 'real' selves.

The IoT threatens to change that. It forges a direct link between the online and offline world and also threatens to import that privacy-destroying Faustian bargain. That factory without walls starts to look a lot like your own home.

It promises to turn everyday events into transactions, generating huge amounts of data, little of which is of much use to you, and most of which will be very handy to others.

Take the lift and not the stairs? Burgers for lunch and not salad? Maybe your life insurance premium just went up. Watch documentaries and shun soap operas? Perhaps you'll get a cheaper loan than your reality-TV-loving neighbour. Pacing up and down in the office? Heartbeat racing in a meeting? Expect a check-up visit from HR.

There are some more profound questions here too, ones that we don't really have answers to yet. So what happens when your 'free' time is actually generating data that others can sell? Does you private life become a form of work? Does this change the nature of labour, of work itself? What is it like to be inside such a panopticon economy?

The IoT could be one of the purest outgrowths of late capitalism imaginable, one that can packages your every waking minute into a product (and the sleeping ones too, of course -- there's many a way of making money out of the data you generate in your slumber).

There's a real danger that it could form part of the ongoing erosion and corporatisation of private spaces in the quest for profit. In a surveillance economy, privacy represents an opportunity for profit forgone.

Who else is listening?

And in such an economy there's always the question of who else is listening. For a long time the 'adult entertainment industry' was one of the leading early adopters of new technology; in the forthcoming data economy it's the intelligence services that are paying most attention.

Knowing those agencies' insatiable desire for data, how secure will this information be? The small devices and sensors that make up the IoT are likely to lack security hardening, encryption, or perhaps even the capability to be patched should a security vulnerability be discovered.

Many of the innovative business models and services that the IoT could deliver will undoubtedly be useful, saving us time and money and creating fantastic new experiences. It might help us make more efficient use of resources and tell us more about ourselves and our bodies than we ever knew before.

However, there are undoubtedly these potential downsides that we must guard against: the IoT can only reach its full potential if we have strong security and privacy safeguards in place. That means we need to be thinking about and demanding those safeguards now.

Regulation is one option, and privacy watchdogs in the US and Europe are increasingly interested in the issues raised by the IoT. Informed consumer pressure is another option here: few ever read a software licence because it has little impact; the terms and conditions that explain how devices will track us during the day and how they share (and protect) that data may be worthy of more scrutiny.

A third option is to protect ourselves: just as anonymisation and privacy tools have sprung up to protect privacy online, perhaps we will see the emergence of similar technologies in real life too (one issue is that it's much harder to opt out of data collection when you're dealing with physical sensors).

The risk is without some significant safeguards in place there are grounds for concern that the IoT will turn us from consumers into profit-generating nodes on a gigantic network designed to gather information about us.

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