Internet of Things Connected cars: risks and opportunities
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1 Internet of Things Connected cars: risks and opportunities Giulio Coraggio, DLA Piper, Milan Elliot Katz, DLA Piper, San Francisco Alan Prescott, Ford Motor Company Jan-Hinnerk Mohr, Boston Consulting Group
2 Global platform Largest law firm in the world, with offices throughout the Americas, Asia Pacific, Europe and the Middle East Global Connected Cars practice housed under the Global Internet of Things group More than 550 DLA Piper lawyers ranked as leaders in their fields by (Chambers and Partners 2015) Page 2
3 DLA Piper Global Internet of Things group 200+ DLA Piper lawyers worldwide with IoT experience Page 3
4 Presenters Giulio Coraggio DLA Piper, Milan Elliot Katz DLA Piper, San Francisco Address questions on Twitter using the hashtag #DLAPiperIoT Alan Prescott Ford Motor Company Jan-Hinnerk Mohr Boston Consulting Group Page 4
5 The future of connected cars Self-driving cars Page 5
6 The future of the automobile A perspective Focus today Development of self-driving offerings Consumer response The future of automobiles: self-driving robo-taxis? Overview on major obstacles Source: Google; BCG Page 6
7 Google's self-driving cars hitting the road already... Google's autonomous driving program to hit the road in 2015 "Now we're announcing the next step for our project: this summer, a few of the prototype vehicles we ve created will leave the test track and hit the familiar roads of Mountain View, Calif., with our safety drivers aboard." May 15, 2015 "The new prototypes will drive with the same software that our existing fleet of self-driving Lexus RX450h SUVs uses. That fleet has logged nearly a million autonomous miles on the roads since we started the project, and recently has been self-driving about 10,000 miles a week." "We're looking forward to learning how the community perceives and interacts with the vehicles, and to uncovering challenges that are unique to a fully self-driving vehicle" Source: Press research; expert interviews; BCG analysis Page 7
8 ...other manufacturers also very active Mercedes F015 autonomous pilot Audi A7 autonomous highway pilot BMW remote valet parking CES 2015 in Las Vegas Valeo autonomous parking system Delphi urban autopilot Source: Press articles, BCG research NVIDIA Tegra processor for autonomous vehicles Bosch traffic jam autopilot system Volkswagen trained parking system Page 8
9 Alternative development pathways and a variety of use cases have emerged Incumbent approach Complexity of traffic situation Incumbent approach Gradually adding more and more autonomous driving feature to increase level of automation On-demand autopilot Robo Taxi Highway truck platoon Challenger approach Challenger approach Starting with self-driving capabilities in narrowly defined traffic situations and expanding those traffic situations later on Partial automation Source: World Economic Forum; BCG analysis Currently favored by incumbent OEMs Beliefs: Full automation takes time to materialize (societal attitude, technology maturity) Vehicle-to-vehicle comm. crucial building block Traditional introduction path: mass market launch starting with premium segment Focus on safety High automation Full automation Level of automation Currently favored by tech players Beliefs: introduce tech early, improve on the go V2V communication optional Introduction possibly via fleet operators (e.g., closed campuses, cities, taxis) In addition to safety, focus on boosting convenience Page 9
10 Customer willingness to buy autonomous cars is strong in the US 55% say they would buy a partially autonomous car # of respondents 44% say they would buy a fully autonomous car # of respondents % of respondents 44% of respondents Very likely Likely Neutral Unlikely Very unlikely Q: When you think about purchasing a vehicle in the future (up to ~5 years from now), how likely are you to consider purchasing a partially self-driving car? Very likely Likely Neutral Unlikely Very unlikely Q: When you think about purchasing a vehicle in the future (up to ~10 years from now), how likely are you to consider purchasing a fully self-driving car? Note: n=1,510 Source: BCG U.S. self-driving cars survey, 2014 Page 10
11 Most substantial obstacles to AV adoption Not exhaustive Industry Society Cybersecurity Highly precise maps Policy maker support AV are highly connected systems that may attract malicious hacking, potentially harm humans Highly precise digital maps are necessary for AV operation but very complex to produce b/c of the dynamic situation of roads How do we limit cybersecurity risks to an acceptable level? How and by whom should these maps be created and updated? Regulator Liability shift Traffic/vehicle regulation Support from policy makers, who are influenced by the general public and affected players, is crucial for AV introduction Liability obligations will likely shift if both human drivers and autopilots drive. The role of insurers may change Existing traffic and vehicle regulation (homologation) may not account for AVs and could inadvertently prevent them How can we ensure policy makers' support? How may this shift play out? Do we need to alter existing regulation? Source: World Economic Forum; BCG analysis Page 11
12 The present of connected cars Ford's experience Page 12
13 Ford Motor Company s experience with connected car privacy Ford s view: We are committed to protecting our customers privacy We do not track our customers or transmit data from the vehicle without customer consent We use connected car data to deliver the services customers request, to troubleshoot, and to improve products Common industry view/vehicle privacy principles: Transparency, choice and respect for context are important There is no one-size fits all approach for vehicle privacy Speed, location, biometrics and driving behavior have high importance to drivers Page 13
14 Data ownership v. data use There is no fundamental privacy right to data ownership and ownership is the wrong way to think about vehicle data Vehicle data privacy is about the right to use data, exclude others from accessing or using data and protecting data No laws define vehicle data ownership except for event data recorder laws (owned by vehicle owner/leaser) Page 14
15 Vehicle cybersecurity We are not aware of any real-world remote vehicle hacking Research reports purport vehicle hacking with the following: Unlimited physical access to interior of vehicle Hard-wired connections to various vehicle electronic modules Vehicle engineering expertise and Knowledge of vehicle software code Potential threats are increasing (more connections, more electronics, more skills) and automakers are responding by working on reasonable security measures Page 15
16 The EU approach Data owner vs. data controller Data security obligations Page 16
17 Privacy compliance of connected cars US vs. European approach Page 17
18 US Consumer Privacy Protection Principles Page 18
19 OEMs that have signed on to the privacy principles Page 19
20 Privacy Principles the seven fundamental principles Transparency Choice Respect for context Data minimization, de-identification and retention Data security Integrity and access Accountability Page 20
21 Transparency and choice Page 21
22 EU same principles Adequate information No hidden monitoring Security cryptography and anonymization Page 22
23 But set out in primary laws European privacy directives Upcoming European regulation Sole solution to minimize risks Page 23
24 Frequent mistakes Attempt to collect more data than necessary Adopt generic privacy notices in order to "accommodate" business needs Assess privacy compliance only when product is already developed privacy by design Lack of communication with regulators e.g. Italian privacy consultation on the IoT Page 24
25 Giulio Coraggio DLA Piper, Milan Alan Prescott Ford Motor Company Elliot Katz DLA Piper, San Francisco Jan-Hinnerk Mohr Boston Consulting Group Page 25
26 Next Internet of Things webinars Smart home and smart hospitality ehealth and telemedicine Page 26
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