FTC lets Nest off the hook over Revolv IoT hub bricking shame
US watchdog puts out advisory for other smart home makers
The US Federal Trade Commission (FTC) has decided not to move forward with an investigation into smart-home company Nest and its decision to end support for the Revolv hub.
In a letter [PDF] to the Google stablemate, the regulator said it had "decided not to recommend enforcement action at this time," referencing "confidential information" that Nest had supplied it with.
Nest controversially decided to end its support of the Revolv hub in April, giving just one month's notice. Due to how it functions, the decision effectively bricked the device, however, leading to outraged customers.
The FTC opened an investigation soon after, noting that it "was concerned that reasonable consumers would not expect the Revolv hubs to become unusable" and so would "cause unjustified, substantial consumer injury."
Nest appears to have avoided official action against it, however, by offering full refunds to customers, the FTC noting: "We considered a number of factors in reaching this decision, including the limited number of units sold; Nest's practice of providing full refunds after the Revolv system shutdown was announced; and its announcements that it will refund Revolv customers the purchase price of the Revolv hub."
As such, "no further action is warranted at this time and the investigation is closed."
The saga has led to some related action, however, with the FTC publishing a blog post which looks suspiciously like an advisory for internet-of-things (IoT) manufacturers.
"What happens when the sun sets on a smart product?" asks the FTC's director of consumer protection, Jessica Rich. In the post, Rich notes that "although we closed the investigation" into Nest/Revolv, "it raises broader issues about what happens when an IoT product or service, or the updates and support for them, stops."
The post then provides a number of questions that it says IoT and smart-home manufacturers should consider, including:
- Whether they are selling a device, a service or both – and what they tell customers they are selling
- Whether customers would expect to keep using the device even if the company folds
- What customers are told about ongoing security and updates
In short, it is a guide to how the FTC will decide in future whether it is going to find a company liable for hurting consumers.
It notes: "IoT businesses who think through these issues are more likely to inspire confidence in their products – increasing the chances that consumers will take a shine to them. We think the future of the IoT is quite bright, and plan to monitor developments in this area to ensure that it remains so."
Or in less friendly language: we are watching and the next time someone pulls a Revolv, they are going to have to deal with us. ®