Modern smart homes represent a fascinating phenomenon. Thanks to electronic technology and the internet of things (IOT), consumers can use devices like smart thermostats and electronic door locks to better manage and control their homes. But whenever you are talking connectivity and the IOT, you're also talking about data protection issues. Those issues raise some very interesting questions.

When the EU implemented its ground-breaking General Data Protection Regulation (GDPR) some years ago, a small number of smart home vendors discovered they could not continue offering service without making significant modifications. But the GDPR was a non-issue for smart home providers in countries not regulated by it.

This has created a disparity between smart home services within the EU and those outside of it. And again, the disparities raise interesting questions. Perhaps if more consumers asked those questions, the smart home wouldn't be as popular as it is.

Notoriously Lax Privacy Laws

The EU came up with the GDPR in order to strengthen privacy laws already on the books. That they did. Any EU company having undergone a GDPR data audit can testify to that. But in some places around the world, privacy laws are notoriously lax. The best example is the US.

Across the Pond, US companies collect and sell data as though it were rice. Data is a staple that feeds so many American corporations who use it to do everything from selling new products to fine-tuning marketing campaigns. Indeed, tech giants like Google and Facebook only exist because they have unparalleled data collection capabilities. They make their money by collecting and selling data.

What does this have to do with the smart home movement? A lot. Consider the Google Home smart speaker and all of the smart home devices it works with. You can use Google Home and voice commands to control your lighting. Ditto for your thermostat, smart locks, and more. Making it all work requires that Google Home always listens. And what do you think Google does with the data its smart speakers collect throughout the day?

Google is not the only company doing this. Nearly every company making devices that depend on the IOT is doing the same thing. From lighting manufacturers to appliance companies making smart TVs and refrigerators, they are all collecting data on their customers.

Selling to the Highest Bidder

A reasonable consumer would hear this sort of thing and begin asking what companies are doing with all that data. While we do not necessarily agree with the practice, we understand why Google does what it does. Google is a data company first and foremost. But an appliance manufacturer makes its money building and selling refrigerators, stoves, and washing machines. Why do they need all of the data they collect?

In countries where data protection is lax, data equals revenue. That is the most troubling aspect of all of this. Companies with the ability to collect data without customers knowing can turn around and sell that data to the highest bidder. Buyers may or may not be organisations consumers want their data going to.

Circumventing Legal Protections

One of the primary purchasers of personal data in the US is government. Whether it is federal agencies – like the FBI or BATF – or state and local agencies almost doesn't matter. The fact that any government agency is able to purchase data so freely should be disturbing to all of us.

Legal protections in the US prevent law enforcement agencies from looking through personal property without a warrant. But there are no laws preventing law enforcement from acting as a paying customer. They can purchase data as legally and easily as a marketing firm. So they do.

Imagine a government agency buying up mountains of personal data and justifying it as a means to fight terrorism. Imagine them buying up data and using it to control immigration. Reasonable people might be able to justify large-scale data grabs for such purposes. After all, defeating global terrorism is a noble cause.

Yet do not forget that the same data-purchasing practices could be used to facilitate causes far less noble. Governments could use bought data to track down and eliminate political enemies. Data could be used to shut down churches and non-profit organisations. It could be used to stifle any and all dissent no matter what form it takes.

Data Fuels Corporatism

Still another concern is how data can be used to fuel corporatism. If you don't think that's happening, you're not paying attention. The world's biggest corporations thrive on data. They treat data as one of their most valuable assets, even more important than the front-line workers who actually make them function.

For the record, corporatism is a mixture of private business ownership and government-engineered socialism. In a corporatist environment, corporations are allowed to own and control all means of production. Because they control the money, they also control politics. Corporations give politicians what they want in exchange for turning a blind eye to what they do.

The end result is a marriage of corporate greed and political power grabbing. The average citizen suffers while corporate executives and politicians reap the benefits. The sad part is that the general population is helping corporatism take over. Among the many ways we are doing so is embracing smart home technology without giving any thought to how our data is being collected and used against us.

Get It Out of the Cloud

The biggest names in the smart home industry will tell you that the only way to maximise the smart home concept is to house it in the cloud. It's not true. A smart home does not need an external cloud to function properly. All of the same computing power residing on Google servers can reside in a local cloud confined to an individual home. External clouds and the IOT are not necessary to make smart homes work.

They are necessary to make the corporate model work. This is why the system is set up the way that it is. If you know anything about the system, you should have plenty of questions about smart homes and data protection, not the least of which is why your smart home providers are collecting your data to begin with.