The Internet of Things (IoT): Emerging Challenges in Product Stewardship

The Internet of Things (IoT), which includes personal assistance devices, wearables, appliances, vehicles, monitors, sensors and more, has created new business opportunities while raising difficult regulatory challenges. With an estimated 8.4 billion devices in use, end-of-life management is just one of those challenges.

“As an environmental lawyer, I think a lot about dirt and waste and where things end up,” said Joe Kakesh, an attorney at Wiley Rein, during a presentation at Product Stewardship 2017. He noted that Extended Producer Responsibility Programs (ERP) could apply to IoT, but how will regulators interpret ‘product scope’ under existing product stewardship laws? Also, who will be obligated to participate in the programs? Specifically, if a device is manufactured by one company and sold by another, is the manufacturer or the brand-owner obligated to participate?

Cost allocation is another issue. In states where market share determines your contribution to ERP programs, is it fair if your product contributes only a small fraction to the overall waste? Moreover, some IoT products are tiny and weigh less but may be more expensive to recycle. The formulas that regulators use need to be re-thought, said Kakesh.

Finally, concern about data security are paramount. Because IoT devices have data processing and information-management capabilities, who is responsible for maintaining and protecting consumers’ information? An OEM may sell a product capable of modifications and upgrades that it has no control over. Deciding who’s responsible the device is in consumers’ hands is unresolved, said Kakesh. Complicating matters is that in standard contract law, what counts as an actual acquiescence or agreement not to modify a device is an issue.

There also has been a lot of regulatory focus on the safety of lithium batteries. The batteries in IoT devices are increasingly non-removable, for aesthetic and design reasons, but that creates concerns for the battery-recycling market, said Kakesh. If the battery can’t be removed, the whole product needs to be collected and recycled.

Kakesh thinks regulators will ask industry whether they want the batteries regulated or the whole product. Few states mandate rechargeable or primary battery recycling programs, because there has been a concerted effort by industry to collect old batteries. “To me, that’s an instance of industry taking the initiative beforehand to stave off more burdensome regulation,” said Kakesh, something the IoT world could learn from.