The Liability of Things

David Wagner, Managing Editor | 4/30/2014 | 14 comments

David Wagner
At the heart of the Internet of Things is a series of devices making decisions without you, and I can’t help but wonder who is liable if your “things” go crazy. The question started because of an article on the Brookings Institute page about who is liable if your self-driving car has an accident, but really it goes much deeper than that. Imagine if your autonomous refrigerator ordered a dozen cartons of eggs instead of a dozen eggs. Do you have to pay? Does the grocery store have to swallow the loss?

There are two related but slightly different liability issues going on here: the product “breaking” and causing serious damage to life or property and the minor defect that causes customer service issues. The breaking scenario is pretty clear. Say you built a self-driving car and because of an error in your design, it hits a group of school children in a crosswalk. You’re going to be sued by the parents of the children and maybe the school. But you might have a new and interesting plaintiff on your hands -- the guy sitting in the car who has the emotional trauma of knowing his car killed a bunch of kids and there was nothing he could do about it.

You might not enjoy the new people who might sue you, but really, existing liability law covers most of this. It really isn’t that different than if you make a car with any other safety defect. This article by a couple of lawyers and the Brookings article agree: We don’t need to change our laws too much to handle this.

But when it comes to these customer service moments, things get a little trickier. It is easy when it is your own product. You make the offer to replace or repair the product just like any other defect. The more interesting thing is how to handle malfunctions from someone else’s products. Let’s say you are the grocery store in the scenario where someone’s fridge goes haywire and orders a bunch of stuff. The best business practice is usually to say that the customer is always right and refund the money even if the product can’t be resold. But that really isn’t enough.

You could consider knocking on the door of the refrigerator maker and try to get your money back from them, but good luck with that. One thing you can do is start building checks into the system like a credit card company protects itself from fraud. You need capabilities that show you whether an order is out of whack with what is normal for the house. Maybe the family is having a big party. Maybe the fridge went crazy. The best way to protect yourself is to find out before you fill the order just as a credit card company calls you if you suddenly go on a wild shopping spree.

Another thing you need to figure out is your policy around autonomous machines to begin with. Do you require a human to confirm? How do you verify and communicate with these systems? How are accounts set up?

There’s quite a lot of work to be done here. And it is good to start working it out now instead of waiting until the Internet of Things overwhelms you with its sheer size. There aren’t too many autonomous coffee pots or cars running around yet. But they’re coming. Get ready.

What about your enterprise? Have any of you started an Internet of Things policy discussion? Comment below.

View Comments: Newest First | Oldest First | Threaded View
Page 1 / 2   >   >>
mejiac   The Liability of Things   5/30/2014 3:21:27 PM
Re: Similar Scenerios
@MDMConsult,

I think it can be safely stated that having information provided within an acceptale timeframe is somewhat expected by today's standards.

I mean, people will complain if they don't get an email as soon as it's sent.

This is something that's essentials for many organizations, to avoid delays in communications reaching the proper channels in an adequate time.

In the consumer world, many retail and entertainment business are trying to take the customer experience to new levels by combining smartphone/tablet technology with the physical experience.

I good example is Disney's "Magic Band", https://disneyworld.disney.go.com/plan/my-disney-experience/bands-cards/?CMP=KNC-WDW_FY14_CFL_NGE_BR_MagicBands|G|4141321.NG.AM.02.07&keyword_id=shcL0CCCq_dc|disney%20magic%20band|56529813328|e|15402cl14044
mejiac   The Liability of Things   5/30/2014 3:08:34 PM
Re: Similar Scenerios
@David,

 

Thanks for your reply...and it makes sense for security protocols to be placed, that given time will probably become the standard.

While surfing the Iphone app store, I laught when I saw an app that on it's descriptiong stated "No internet connection requried, no in app purchase.... just plain fun"
MDMConsult   The Liability of Things   5/15/2014 1:06:04 AM
Re: Similar Scenerios
Yes, Technologies such as smartphones, tablets and mobile apps have made data information conveniently available to the customer. This is a way to help people receive information in less time and by making more informed decisions.
Joe Stanganelli   The Liability of Things   5/8/2014 8:11:01 AM
Re: Old law still works on new tech.
Yes, third-parties always make contract conundrums more complicated.  And every situation is different.

That said, I had a tax law professor who had a great saying about this sort of stuff: "Equity finds its way."

And so it would here.  If a person had a robot fridge going haywire and secretly ordering all sorts of food in crazy amounts (doesn't this remind you of a Looney Tunes cartoon scenario?), that person would almost certainly be entitled to be kept or made whole financially in almost every scenario I can imagine.
batye   The Liability of Things   5/6/2014 1:01:54 AM
Re: Similar Scenerios
interesting observation Joe... but until legal problem happens and everyone start finger pointing game...
David Wagner   The Liability of Things   5/5/2014 2:10:52 PM
Re: Old law still works on new tech.
@Joe- Thanks! That's what i lvoe about our community. We have so much expertise. That said, there seems to be some disagreement on that front from other legal folk, because the "mistake" comes from a new source. By bring in a 3rd party, according to them, it at least muddles the legal situation.

Clearly, I'm no expert. Just reporting what they say.
Joe Stanganelli   The Liability of Things   5/2/2014 1:27:25 PM
Re: Similar Scenerios
> Developers won't hear them, but I hope the business product people and the legal department do.

 

Yeah, but developers don't like to listen to the legal department.  ;)

Joe Stanganelli   The Liability of Things   5/2/2014 1:22:49 PM
Old law still works on new tech.
Existing contract law deals with your dozen eggs vs. dozen cartons of eggs example.  It goes to Article Two of the Uniform Commercial Code (which is pretty much codified in some form or another in every or almost every US jurisdiction) -- specifically, the parts that deal with a "Mistake."  If the Party A has reason to know of the mistake that Party B made, Party A generally doesn't get to take advantage of that fact.

So, for instance, if Smith's Groceries knows that Mrs. Carter generally orders a dozen eggs every two weeks from their store via her automated system, and then one day it shows up as 144 eggs, there is an argument that could be made that Smith's should at least call up Mrs. Carter to say, "Are you SURE you want 144 eggs?"

Of course, even in those circumstances where Party B would be on the hook for the order of the dozen cartons of eggs, the the manufacturer/fridge seller/etc. could be on the hook to reimburse Party B under a strict liability theory under existing product liability law for the extra eggs.

 

(Disclaimer: The above is provided for informational, educational, and/or entertainment purposes only. Neither this nor other posts here constitute legal advice or the creation, implication, or confirmation of an attorney-client relationship. For actual legal advice, personally consult with an attorney licensed to practice in your jurisdiction.)
Ariella   The Liability of Things   5/1/2014 12:42:57 PM
Re: Similar Scenerios
@Jastro it also reminds me of the mops continuing to carry in water until the place flooded in "The Sorcerer's Apprentice" sequence of Fantasia. They just follow orders, but sometimes what you think is helpful gets out of control and becomes destructive.
David Wagner   The Liability of Things   5/1/2014 11:47:13 AM
Re: Similar Scenerios
@jastro- Anyone who has ever tried to get a snack out of a vending machines knows never to trust one. :)
Page 1 / 2   >   >>


The blogs and comments posted on EnterpriseEfficiency.com do not reflect the views of TechWeb, EnterpriseEfficiency.com, or its sponsors. EnterpriseEfficiency.com, TechWeb, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.

More Blogs from David Wagner
David Wagner   5/30/2014   21 comments
For almost three and a half years I have had the pleasure and real privilege to write the Geekend for you every Friday. Fortunately, that privilege isn't ending, it is just moving to our ...
David Wagner   5/23/2014   69 comments
Most of us have gone through the pain of losing a beloved pet. Maybe you lived a long and happy life together, and it died peacefully. Maybe it was tragically struck down by a car or a ...
David Wagner   5/22/2014   47 comments
It is a rare thing when you find me advocating for the government to get more involved in regulating technology, but when it comes to the Internet of Things, that is what I'm advocating. ...
David Wagner   5/21/2014   13 comments
E2 has long trumpeted the days when 3D printers would sit on our desks and print prototypes, consumer goods, and even body parts right from our desk, but a new cloud manufacturing company ...
David Wagner   5/16/2014   40 comments
With Disney's success with the Avengers franchise, geeks everywhere are being treated to an outrageously large number of TV shows and movies based on comic book superhero characters. For ...
Latest Archived Broadcast
We talk with Bernard Golden about accelerating application delivery in the cloud.
On-demand Video with Chat
Register for this video discussion to learn how tablets can provide true business usability and productivity.
E2 IT Migration Zones
IT Migration Zone - UK
Why PowerShell Is Important
Reduce the Windows 8 Footprint for VDI
Rethinking Storage Management
IT Migration Zone - FR
SQL Server : 240 To de mémoire flash pour votre data warehouse
Quand Office vient booster les revenus Cloud et Android de Microsoft
Windows Phone : Nokia veut davantage d'applications (et les utilisateurs aussi)
IT Migration Zone - DE
Cloud Computing: Warum Unternehmen trotz NSA auf die „private“ Wolke setzen sollten
Cloud Computing bleibt Wachstumsmarkt – Windows Azure ist Vorreiter
Like Us on Facebook
Twitter Feed
Enterprise Efficiency Twitter Feed
Site Moderators Wanted
Enterprise Efficiency is looking for engaged readers to moderate the message boards on this site. Engage in high-IQ conversations with IT industry leaders; earn kudos and perks. Interested? E-mail:
[email protected]
Dell's Efficiency Modeling Tool
The major problem facing the CIO is how to measure the effectiveness of the IT department. Learn how Dell’s Efficiency Modeling Tool gives the CIO two clear, powerful numbers: Efficiency Quotient and Impact Quotient. These numbers can be transforma¬tive not only to the department, but to the entire enterprise.

Read the full report
The State of Enterprise Efficiency in the Virtual Era: Virtualization – Smart Approaches to Maximize Gains
Virtualization is a presence in nearly all enterprise data centers. But not all companies are using it to its best effect. Learn the common characteristics of success, what barriers companies face, and how to get the most from your efforts.

Read the full report
Informed CIO: Dollars & Sense: Virtual Desktop Infrastructure
Cut through the VDI hype and get the full picture -- including ROI and the impact on your Data Center -- to make an informed decision about your virtual desktop infrastructure deployments.

Read the full report
SPONSORED BY DELL
CASE STUDIES
EBOOKS
PUBLIC SECTOR RESOURCES
VIDEOS
WHITE PAPERS
WINDOWS SERVER 2012 RESOURCES
A Video Case Study – Translational Genomics Research Institute
e2 Video


On the Case
TGen IT: Where We're Going Next

7|11|12   |   08:12   |   10 comments


Now that TGen has broken new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions, the company discusses what will come next for it and for personalized medicine.
On the Case
Better Care Through Better Communications

6|6|12   |   02:24   |   11 comments


The achievements of the TGen/Dell project could improve how all people receive healthcare, because they are creating ways to improve end-to-end communication of medical data.
On the Case
TGen IT: Where We Are Now

5|15|12   |   06:58   |   6 comments


TGen is breaking new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions.
On the Case
TGen IT: Where We Were

4|27|12   |   06:45   |   10 comments


The Translational Genomics Research Institute wanted to save lives, but its efforts were hobbled by immense computing challenges related to collecting, processing, sharing, and storing enormous amounts of data.
On the Case
1,200% Faster

4|18|12   |   02:27   |   12 comments


Through their partnership, Dell and TGen have increased the speed of TGen’s medical research by 1,200 percent.
On the Case
IT May Improve Children's Chances of Survival

4|17|12   |   02:12   |   8 comments


IT is helping medical researchers reach breakthroughs in a way and pace never seen before.
On the Case
Medical Advances in the Cloud

4|10|12   |   1:25   |   5 comments


TGen and Dell are pushing the boundaries of computing, and harnessing the power of the cloud to improve healthcare.
On the Case
TGen: Living the Mission

4|9|12   |   2:25   |   3 comments


TGen's CIO puts the organizational mission at the heart of everything the IT staff does.
On the Case
TGen Speeding Up Biomedical Research to Save More Lives

4|5|12   |   1:59   |   6 comments


The Translational Genomics Research Institute is revamping its computing to improve speed, storage, and collaboration – and, most importantly, to save lives.
On the Case
Computing Power Helping to Save Children's Lives

3|28|12   |   2:13   |   3 comments


The Translational Genomics Institute’s partnership with Dell is enabling them to treat kids with neuroblastoma more quickly and save more lives.
Tom Nolle
The Big Reason to Use Office

3|18|14   |   02:24   |   46 comments


Office and personal productivity tools come in a first-class and coach flavor set, but what makes the difference is primarily little things that most users won't encounter. What's the big issue in using something other than Office, and can you get around it?
E2 Editors
SPONSORED: Mobile Security — A Use Case

3|4|14   |   04:27   |   16 comments


New mobile security solutions can accommodate a wide array of needs, including those of a complex university environment.
Tom Nolle
Killing Net Neutrality Might Save You Money

1|16|14   |   2:13   |   16 comments


The DC Court of Appeals voided most of the Neutrality Order, and whatever it might mean for the Internet overall, it might mean better and cheaper Internet VPNs for businesses.
Tom Nolle
The Internet of Everythinguseful

1|10|14   |   2:18   |   19 comments


We really don't want an "Internet of Everything" but even building an Internet of Everythinguseful means setting some ground rules to insure there's value in the process and that costs and risks are minimized.
Tom Nolle
Maturing Google Chrome

12|30|13   |   2.18   |   25 comments


Google's Chrome OS has a lot of potential value and a lot of recent press, but it still needs something to make it more than a thin client. It needs cloud integration, it needs extended APIs via web services, and it needs to suck it up and support a hard drive.
Sara Peters
No More Cookie-Cutter IT

12|23|13   |   03.58   |   21 comments


Creating the right combination of technology, people, and processes for your IT organization is a lot like baking Christmas cookies.
Sara Peters
Smart Wigs Not a Smart Idea

12|5|13   |   3:01   |   46 comments


Sony is seeking a patent for wigs that contain computing devices.
Tom Nolle
Cloud in the Wild

12|4|13   |   02:23   |   15 comments


On a recent African trip I saw examples of the value of the cloud in developing nations, for educational and community development programs. We could build on this, but not only in developing economies, because these same programs are often under-supported even in first-world countries.
E2 Editors
SPONSORED: Is Malware Evading Your IPS?

11|18|13   |   03:16   |   4 comments


Intrusion prevention software is supposed to detect and block malware intrusions, but clever malware authors can evade your IPS in these five main ways.
Sara Peters
Where Have All the Mentors Gone?

9|27|13   |   3:15   |   38 comments


A good professional mentor can change your life for the better... but where do you find one?
Tom Nolle
SDN Wars & You Could Win

9|17|13   |   2:10   |   5 comments


VMware's debate with Cisco on SDN might finally create a fusion between an SDN view that's all about software and another that's all about network equipment. That would be good for every enterprise considering the cloud and SDN.
Ivan Schneider
The Future of the Smart Watch

9|12|13   |   3:19   |   39 comments


Wearing a bulky, oversized watch is good training for the next phase in wristwatches: the Internet-enabled, connected watch. Why the smartphone-tethered connected watch makes sense, plus Ivan demos an entirely new concept for the "smart watch."
Tom Nolle
Cutting Your Cloud Storage Costs

9|4|13   |   2:06   |   3 comments


Cloud storage costs are determined primarily by the rate at which files are changed and the possibility of concurrent access/update. If you can structure your storage use to optimize these factors you can cut costs, perhaps to zero.
Sara Peters
Do CIOs Need an IT Background?

8|29|13   |   2:11   |   23 comments


Most of the CIOs interviewed in the How to Become a CIO series did not start their careers as IT professionals. So is an IT background essential?
Ivan Schneider
The Internet Loves Birthdays

8|27|13   |   3:25   |   69 comments


The Internet has evolved into a machine for drumming up a chorus of "Happy Birthday" messages, from family, friends, friends of friends who you added on Facebook, random people that you circled on G+, and increasingly, automated bots. Enough already.