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As smartwatches gain traction, personal data privacy worries mount

Matt Hamblen | May 27, 2015
Companies could use wearables to track employees' fitness, or even their whereabouts.

"I worry about what will happen" if the data is used against a smartwatch owner in a future case, Khatibloo said. "There's a lot of information on a wearable. Maybe a car insurance company could subpoena somebody's smartwatch data saying she didn't sleep well last night or slept only four hours a night, which led to an accident. That's the kind of stress that wearable users have to worry about. We don't have a good handle on the use of that data from a regulatory perspective and we need to write regulations to encompass all these...egregious and discriminatory uses of data."

Fitness data used to lower insurance rates

At a few companies, fitness data from smartwatches and fitness bands worn by employees is being used to prove they are staying physically active, which in turn is used to help lower corporate insurance rates. Cloud computing provider Appirio has reported a 5% decline in its corporate insurance rates as a result of such a program, said Forrester analyst JP Gownder.

Separately, insurer John Hancock's Vitality program offers up to 15% off its life insurance to customers who voluntarily share health data collected in part via a free Fitbit wrist wearable, Gownder said. Members of the program get Vitality points by going to the gym, staying tobacco free or getting annual health screenings.

"The systemwide issue is how the individual feels about this trend," Gownder said. "For the benefits I'm getting, what are the risks? If my health data is out there and somehow gets compromised, it might show that I'm not very active and you wonder how that can hurt you. There are a lot of questions."

If companies gather data on products a person buys or how often he or she works out, the data might be used to populate an algorithm used to predict heart disease or diabetes. Some analytical tools look not only at how many steps a person takes while wearing a device, but even the distance between steps as an indicator of a health problem, Gownder said.

"Theoretically, it's quite possible and suspect that a person won't get a job because he's some kind of a couch potato," Gownder said. "These new devices are opening up all kind of categories for potential discrimination."

One possible scenario is that a business might track a smartwatch user's location to see how many times he or she leaves his desk to have a bathroom break or a smoking break, said Carolina Milanesi, chief of research at Kantar WorldPanel. "Think about being the first time that data is used against a pregnant employee," she said. "The scenarios are endless."

Strategic value with wearables for workers and customers


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