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Smart devices are electronic devices that can connect, share, and communicate with other smart devices via different wireless protocols such as Bluetooth, Wi-Fi, or 4G. These devices include smartphones, cars, watches, homes, speakers, or even a key chain. Smart devices have built-in sensors which are a key factor in their physical construct. Each device has a sensor which converts physical variable into electrical signals due to the algorithms which are performed by a small built-in microprocessor unit. A smart speaker, for example, is a smart device which has built-in voice recognition technology that can understand what is being said within its surrounding. According to the article by Electronicsnotes, different manufacturers use voice recognition on their devices which are activated with a certain word and send the recording over the internet to a processing area or a particular service (Electronicnotes, n.d).

Privacy had become a big concern with the widespread of the internet of things (IoT) devices. Smart devices with assistants are a cause for concern because they are connected to the internet at all times which transmits personalize information to data gathering services. There have been many data breaches over the years including companies such as Target, Equifax, Paradise Papers and many more. Customers have to be mindful of the products that they buy from manufacturers or even from third party manufacturer which could lead to a compromise in privacy. Some companies outsource work because it might save time and money but having an outside company build software or hardware can compromise the security and privacy of unaware customers. According to Korolov, researchers at Flashpoint intelligence discovered criminals were attacking open-source Magento e-commerce platform to get credit card records and install malware focused on crypto mining (Korolov, 2019).

The Regulation of the European Parliament and of the Council Article 82 state that if an agency, company, or other bodies which processes personal data should be exempt from liability if it proves that it is not in any way responsible for damages in court. If a person suffers material or non-material damages as a result of an infringement shall have the right to receive compensation for the damages suffered (General Data Protection Regulation, 2016).

California Consumer Privacy Act (CCPA) is a state statute that applies to a company that collects personal information for Californians. Companies or agencies that fail to provide protection or fail to cure violations within time are made liable for civil penalties of up to $7,500 per violation (Mulligan, Freeman, Linebaugh, 2019).

Numerous consequences can occur from the loss of a customer’s privacy by an organization. There are financial, legal, reputational, and operational consequences that will break the trust with a client. Companies that face the loss of customer’s privacy due to data breach faces financial loss, regulatory fines and usually see a drop in revenue. In cases found with companies such as Equifax, Uber, and Yahoo, hackers gained access to files containing personal information that affect the reputation of each company, lowing stock prices and heads of organization resigning (Brooks, 2018).

Loss of customer’s privacy due to cyber-attacks, neglect by companies not only disrupts the operation of companies but the lives of individuals. Companies that utilize third-party equipment should always be aware of the security risk and do their due diligence in finding and mitigating the problem. Being such a large company that has many extensions, Red Clay Renovations should know and be aware of their company from the legal ramifications, operational structure, and third-party involvement to maintain a successful business.


Brooks, R. (2018, November 29). What to Know about a Data Breach: Definition, Types, Risk Factors and Prevention Measures. Retrieved January 14, 2020, from https://blog.netwrix.com/2018/11/29/what-to-know-about-a-data-breach-definition-types-risk-factors-and-prevention-measures/.

Electronicnotes (n.d.). What is a Smart Speaker: how do smart speakers work. Retrieved January 14, 2020, from https://www.electronics-notes.com/articles/equipment-items-gadgets/smart-home/what-is-smart-speaker.php.

Korolov, M. (2019, January 25). What is a supply chain attack? Why you should be wary of third-party providers. Retrieved January 14, 2020, from https://www.csoonline.com/article/3191947/what-is-a-supply-chain-attack-why-you-should-be-wary-of-third-party-providers.html.

General Data Protection Regulation (2016). Official Journal of the European Union. Retrieved January 14, 2020, from https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0679&from=EN

Mulligan, S., Freeman, W., Linebaugh, C. (2019, March 25). Data Protection Law: An Overview. Retrieved January 14, 2020, from https://fas.org/sgp/crs/misc/R45631.pdf

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