[House Report 117-509]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-509
======================================================================
INFORMING CONSUMERS ABOUT SMART DEVICES ACT
_______
September 28, 2022.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Pallone, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 4081]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4081) to require the disclosure of a camera or
recording capability in certain internet-connected devices,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Summary.............................................. 1
II. Background and Need for the Legislation.......................... 2
III. Committee Hearings............................................... 2
IV. Committee Consideration.......................................... 3
V. Committee Votes.................................................. 4
VI. Oversight Findings............................................... 7
VII. New Budget Authority, Entitlement Authority, and Tax Expenditures 7
VIII.Federal Mandates Statement....................................... 7
IX. Statement of General Performance Goals and Objectives............ 7
X. Duplication of Federal Programs.................................. 7
XI. Committee Cost Estimate.......................................... 7
XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits...... 7
XIII.Advisory Committee Statement..................................... 8
XIV. Applicability to Legislative Branch.............................. 8
XV. Section-by-Section Analysis of the Legislation................... 8
XVI. Changes in Existing Law Made by the Bill, as Reported............ 9
I. PURPOSE AND SUMMARY
H.R. 4081, the ``Informing Consumers about Smart Devices
Act,'' requires manufacturers of internet-connected devices
(e.g., smart appliances) that are equipped with a camera or
microphone to disclose to consumers that a camera or microphone
is part of the device. The legislation does not apply to mobile
phones, laptops, or other devices that a consumer would
reasonably expect to include a camera or microphone. The
legislation also requires the Federal Trade Commission (FTC) to
issue guidance to assist entities that manufacture covered
devices with compliance and provides authority for the FTC to
enforce violations, including the authority to seek civil
penalties for violations.
II. BACKGROUND AND NEED FOR LEGISLATION
Consumer devices capable of connecting to the internet,
including Internet of Things (IoT) devices, are increasingly
common in American homes. According to one survey, the average
American home has 11 IoT devices, 28 percent of consumers have
at least one home automation device connected to the internet,
and 11 percent of consumers claim to use at least three
connected home automation devices.\1\ Moreover, leading
researchers have found that some IoT devices, such as Amazon's
Alexa, Apple's Siri, Google Assistant, and Microsoft's Cortana,
can be tricked into recording when they hear certain words that
may not have come directly from the end user or with their
consent, and these errors could happen at least once an
hour.\2\ These problems are particularly acute in the context
of IoT and other internet-connected devices due to their
ability to transmit such information, including possibly to the
People's Republic of China (PRC).
---------------------------------------------------------------------------
\1\Deloitte Insights, Build It and They Will Embrace It (2019).
\2\Consumer Reports, Yes, Your Smart Speaker Is Listening When It
Shouldn't (July 9, 2021) (https://www.consumerreports.org/smart-
speakers/yes-your-smart-speaker-is-listening-when-it-should-not/).
---------------------------------------------------------------------------
It appears that over the last few years the PRC has
explored new avenues for collecting American's information. In
2020, former Acting Department of Homeland Security Secretary
Chad Wolf warned Americans that China may be using TCL
Technology, a Chinese based television manufacturer, as a way
to collect information from their users through backchannels
incorporated in all of their televisions. Such backdoors
exposed users to cyber breaches and data exfiltration.\3\ As
technology continues to advance in devices and consumer goods,
it is imperative that consumers have full transparency over the
features and functionality of such devices, including whether
they are operating in the background when not in use by
consumers and whether or not information is collected in ways
not apparent to consumers. Consumers should not be forced to
choose between enjoying the modern benefits and conveniences of
IoT devices and the comfort of knowing they are not being
monitored by cameras or microphones without their knowledge or
consent.
III. COMMITTEE HEARINGS
For the purposes of section 3(c) of rule XIII of the Rules
of the House of Representatives, the following hearing was used
to develop or consider H.R. 4081:
The Subcommittee on Digital Commerce and Consumer
Protection held a hearing on June 13, 2017, entitled,
``Disruptor Series: Update on IoT Opportunities and
Challenges.'' The Subcommittee received testimony from the
following witnesses:
William S. Marras, Ph.D., Executive Director
and Scientific Director of the Spine Research
Institute, The Ohio State University;
Gary D. Butler, Ph.D., Founder, Chairman and
CEO, Camgian Microsystems Corporation;
Mark Bachman, Ph.D., CTO and Co-Founder,
Integra Devices;
Peter B. Kosak, Executive Director, Urban
Active Solutions, General Motors North America;
Cameron Javdani, Director of Sales and
Marketing, Louroe Electronics; and
Bill Kuhns, President, Vermont Energy
Control Systems LLC.
The Subcommittee on Digital Commerce and Consumer
Protection held a hearing on January 18, 2018, entitled,
``Disruptor Series: The Internet of Things, Manufacturing and
Innovation.'' The Subcommittee received testimony from the
following witnesses:
Rodney Masney, Vice President, Technology
Service Delivery, Information Technology, Owens-
Illinois;
Sanjay Poonen, Chief Operating Officer,
VMWare;
Thomas D. Bianculli, Chief Technology
Officer, Zebra Technology; and
Thomas R. Kurfess, Ph.D., P.E., Professor
and HUSCO/Ramirez Distinguished Chair in Fluid Power
and Motion Control, George W. Woodruff School of
Mechanical Engineering, Georgia Institute of
Technology.
The Subcommittee on Consumer Protection and Commerce held a
legislative hearing on May 26, 2022, entitled, ``Legislative
Hearing to Protect Consumers and Strengthen the Economy.'' The
Subcommittee received testimony from the following witnesses:
Katlin Kraska, Director of Federal
Legislation, Government Relations, American Society for
the Prevention of Cruelty to Animals;
Julie Menin, Former Commissioner, New York
City Department of Consumer Affairs;
Hadley Heath Manning, Vice President for
Policy, Independent Women's Forum; Partner, Wiley Rein
LLP;
Michael O'Neal, Vice President--Corporate
Underwriting, First American Title Insurance Company;
Trista Hamsmith, Founder and Reese's Mom,
Reese's Purpose;
Eric D. Hagopian, CEO and President, Pilot
Precision Products; and
Tori Barnes, Executive Vice President,
Public Affairs and Policy, U.S. Travel Association.
IV. COMMITTEE CONSIDERATION
H.R. 4081, the ``Informing Consumers About Smart Devices
Act'', was introduced on June 23, 2021, by Representatives
Curtis (R-UT) and Moulton (D-MA) and was referred to the
Committee on Energy and Commerce. Subsequently, on June 24,
2021, the bill was referred to the Subcommittee on Consumer
Protection and Commerce. A legislative hearing was held on May
26, 2022.
On June 23, 2022, the Subcommittee on Consumer Protection
and Commerce met in open markup session, pursuant to notice, to
consider H.R. 4081 and seven other bills. No amendments were
offered during consideration of the bill. Upon conclusion of
consideration of the bill, the Subcommittee on Consumer
Protection and Commerce agreed to report the bill favorably to
the full Committee, without amendment, by a roll call vote of
21 yeas to zero nays.
On July 20, 2022, the full Committee met in open markup
session, pursuant to notice, to consider H.R. 4081 and five
other bills. During consideration of the bill, no amendments
were offered. Upon conclusion of consideration of the bill, the
full Committee agreed to a motion on final passage offered by
Representative Pallone, Chairman of the Committee, to order
H.R. 4081 reported favorably to the House, without amendment,
by a roll call vote of 53 yeas to zero nays.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list each record vote
on the motion to report legislation and amendments thereto. The
Committee advises that there were two record votes taken on
H.R. 4081, including a motion by Mr. Pallone ordering H.R. 4081
favorably reported to the House, as amended. The motion on
final passage of the bill was approved by a record vote of 53
yeas to zero nays. The following are the record votes taken
during Committee consideration, including the names of those
members voting for and against:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the
oversight findings and recommendations of the Committee are
reflected in the descriptive portion of the report.
VII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
Pursuant to 3(c)(2) of rule XIII of the Rules of the House
of Representatives, the Committee adopts as its own the
estimate of new budget authority, entitlement authority, or tax
expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
The Committee has requested but not received from the
Director of the Congressional Budget Office a statement as to
whether this bill contains any new budget authority, spending
authority, credit authority, or an increase or decrease in
revenues or tax expenditures.
VIII. FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
IX. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to require
manufacturers of certain internet-connected devices that are
equipped with a camera or microphone to disclose to consumers
that a camera or microphone is part of the device and to
require the FTC to issue guidance and enforce compliance,
including through seeking civil penalties for violations.
X. DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 4081 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
XI. COMMITTEE COST ESTIMATE
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
XII. EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 4081 contains no earmarks, limited
tax benefits, or limited tariff benefits.
XIII. ADVISORY COMMITTEE STATEMENT
No advisory committee within the meaning of section 5(b) of
the Federal Advisory Committee Act was created by this
legislation.
XIV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
XV. SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 designates that the short title may be cited as
the ``Informing Consumers about Smart Devices Act.''
Sec. 2. Required disclosure of a camera or recording capability in
certain internet-connected devices
Section 2 requires that each manufacturer of a covered
device shall disclose whether a covered device they manufacture
contains a camera or microphone as a component of the device.
Sec. 3. Enforcement by the Federal Trade Commission
Subsection (a) establishes that violations of section 2 of
the legislation shall be treated as a violation of a rule
defining an unfair or deceptive act or practice under 15 U.S.C.
57a(a)(1)(B).
Subsection (b) establishes that the FTC shall have the same
means to enforce the legislation and violators of the
legislation will be subject to the same penalties and
privileges as provided in the Federal Trade Commission Act.
Subsection (c) requires the FTC to issue guidance within
180 days of enactment to assist manufacturers with compliance
and providing best practices for making the disclosures
required by section 2 of the legislation.
Subsection (d) allows manufacturers of covered devices to
petition the FTC for tailored guidance on how to meet the
requirements of section 2.
Subsection (e) states that FTC guidance under this section
does not confer any rights on nor bind any person or the FTC in
any way. The FTC may only base enforcement actions and execute
consent orders under the legislation on practices alleged to
specifically violate section 2.
Sec. 4. Definition of covered device
Section 4 defines a covered device to mean any consumer
product defined by 15 U.S.C. 2052(a) that is capable of
connecting to the internet, a component of which is a camera or
microphone, and is not (i) a telephone (including mobile
phone), laptop, tablet, or other device a consumer would
reasonably expect to have a microphone or camera; (ii) any
device specifically marketed as a camera, telecommunications
device, or microphone; or (iii) any device or apparatus
described in 47 U.S.C. 255, 617, 619, 303(aa), 303(bb) or
regulations promulgated thereunder.
Sec. 5. Effective date
Section 5 states the legislation applies to all devices
manufactured 180 days after the FTC issues guidance under
section 3(c) and shall not apply to devices manufactured or
sold before that date.
XVI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
There are no changes to existing law made by the bill H.R.
4081.
[all]