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Technology Law

| 3 minute read

Disclosed Obsolescence: FTC Scrutinizes Transparency in Smart Device Support

The proliferation of connected devices has fundamentally altered the relationship between consumers and their purchased products. Smart device manufacturers maintain ongoing control through software updates, subscriptions, data collection, and integration restrictions, challenging traditional notions of product ownership. But what happens when that manufacturer sunsets software support, leaving the product vulnerable or obsolete? Connected device software lifespan issues have grown increasingly frequent, with minor inconveniences caused by disconnected garage openers and serious disruptions by vulnerabilities in legacy medical devices.

In its latest report, the FTC addresses issues with connected device software support, highlighting harms from misrepresentations or omissions in consumer disclosures. It admonishes manufacturers for failing to disclose software support lifespan information, which can result in a product losing functionality, becoming vulnerable to security incidents, or ceasing to operate without the consumer’s knowledge.

The FTC limits the report to devices likely used for personal or family purposes or commonly found at home. It finds that only 13 of 184 surveyed products included software support information on the product’s main webpage. Another 30 devices had the information on the manufacturer’s website. The report warns that these insufficient disclosures could violate Section 5 of the FTC Act’s unfairness and deception prongs or the Magnuson Moss Warranty Act, potentially leading to investigations, enforcement actions, or litigation.

What should businesses consider when disclosing software support information?

Working backwards from practices the FTC deems unsatisfactory offers guidelines for businesses on crafting their disclosures and insight into the agency's research and investigative processes.

Include information on the product webpage and manufacturer’s support page. Staff looked for support information near the point of sale, suggesting an expectation that consumers be provided these details during their purchase decision. If the product webpage lacked these disclosures, staff checked the manufacturer’s support page. For transparency, businesses should disclose software support information in both locations. They must ensure these disclosures are consistent: the FTC called out two devices that indicated lifetime support on the product webpage, but the support page stated that it had ceased or would cease at a defined date.

Unbundle information about duration and level of support. Certain products used phrases like “lifetime technical support” or “continuous software updates” that left ambiguity about the software lifespan. To avoid allegations of deception, information about how long and what support will be provided should be clearly and separately disclosed.

Note the product’s release date. Stating that support is guaranteed for a set number of years after a product’s release is a step in the right direction, but can be meaningless without providing the date. The report notes the difficulty such incomplete disclosures created for staff calculating support end dates. Accordingly, businesses should clearly disclose the product’s release date, or when software support terminates. If it’s unclear to regulators, it’s unclear to consumers, and vice versa.

Use the three-minute test. FTC researchers deemed a product’s support information “readily available” if it could be found in three minutes or less. Businesses can recreate this test to gauge the availability of a product’s information by having an impartial friend, colleague, or outside counsel attempt to find it in that time.

Review AI summaries from search engines. In a novel approach, FTC staff initially checked the AI summary section of the search results for software support information. If it lacked information, staff looked elsewhere. Emphasizing content produced by an AI summary could impose some responsibility on a manufacturer over how a third-party AI provider synthesizes information about their product. If an AI summary is inaccurate, disclosures may not be legally sufficient. Of course, information provided in Google’s AI Overview can misalign with a product webpage due to a robots.txt file prohibiting web crawler access, account log-in requirements, or recent site updates, among other reasons. Considering the pervasiveness of AI hallucinations, businesses must ensure services like Google’s AI Overview convey accurate and complete information to consumers.

With accolades comes heightened risk. The FTC sourced the products for its study like many are finding holiday gifts: searching Google and scrolling curated lists. It consulted PCMag and Consumer Reports’ tested product lists and conducted a general online search for top smart home devices. A product’s visibility on “top product” lists should prompt a business to carefully review any related disclosures; if a consumer is directed to the product, so are regulators.

Tags

smart devices, ftc, disclosure, guidance, technology law