A wave of biological privacy laws may be coming as tech gadgets capture our brain waves
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The question “What is a thought?” is no longer strictly a philosophical one. Like anything else measurable, our thoughts are subject to increasingly technical answers, with data captured by tracking brainwaves. That breakthrough also means the data is commodifiable, and captured brain data is already being bought and sold by companies in the wearable consumer technologies space, with few protections in place for users.
In response, Colorado recently passed a first-in-the-nation privacy act aimed at protecting these rights. The act falls under the existing “Colorado Consumer Protection Act,” which aims to protect “the privacy of individuals’ personal data by establishing certain requirements for entities that process personal data [and] includes additional protections for sensitive data.”
The key language in the Colorado act is the expansion of the term “sensitive data” to include “biological data” — inclusive of numerous biological, genetic, biochemical, physiological, and neural properties.
Elon Musk’s Neuralink is the most famous example of how technology is being embedded with the human mind, though it isn’t alone in the space, with Paradromics emerging as a close competitor, alongside devices that have returned speech to stroke victims and helped amputees move prosthetic limbs with their minds. All of these products are medical devices that require implantation, and are protected under HIPAA’s strict privacy requirements. The Colorado law is focused on the rapidly growing consumer technology sphere and devices that don’t require medical procedures, have no analogous protections, and can be bought and used without medical oversight of any kind.
There are dozens of companies making products that are wearable technologies capturing brain waves (aka neura data). On Amazon alone, there are pages of products, from sleep masks designed to optimize deep sleep or promote lucid dreaming, to headbands promising to promote focus, and biofeedback headsets that will take your meditation session to the next level. These products, by design and necessity, capture neural data through use of small electrodes that produce readings of brain activity, with some deploying electric impulses to impact brain activity.
The laws in place for the handling all of that brain data are virtually non-existent.
“We have entered the world of sci-fi here,” said lead sponsor of the Colorado bill, Representative Cathy Kipp. “As with any advances in science, there must be guardrails.”
‘ChatGPT-moment’ for consumer brain tech
A recent study by The NeuroRights Foundation found that of thirty companies examined who are making wearable technology that is capable of capturing brainwaves, twenty-nine “provide no meaningful limitations to this access.”
“This revolution in consumer neurotechnology has been centered on the increasing ability to capture and interpret brainwaves,” said Dr. Sean Pauzauskie, medical director at The NeuroRights Foundation. Devices using electroencephalography, a tech readily available to consumers, is “a multibillion-dollar market that is set to double over the next five or so years,” he said. “Over the next two to five years it is not implausible that neurotechnology might see a ChatGPT-moment.”
How much data can be collected depends upon several factors, but the technology is rapidly advancing, and could lead to an exponential increase in applications, with the tech increasingly incorporating AI. Apple has already filed patents for brain-sensing AirPods.
“Brain data are too important to be left unregulated. They reflect the inner workings of our minds,” said Rafael Yusuf, professor of biological sciences and director, NeuroTechnology Center, Columbia University, as well as Chairman of the NeuroRights Foundation and leading figure in the neutotech ethics organization Morningside Group. “The brain is not just another organ of the body,” he added. “We need to engage private actors to ensure they adopt a responsible innovation framework, as the brain is the sanctuary of our minds.”
Pauzauskie said the value to companies comes in the interpretation or decoding of the brain signals collected by wearable technologies. As a hypothetical example, he said, “if you were wearing brain-sensing earbuds, not only would Nike know that you browsed for runners’ shoes from your browsing history, but could now know how interested you were as you browsed.”
A wave of biological privacy legislation may be needed
The concern targeted by the Colorado law may lead to a wave of similar legislation, with heightened attention to the mingling of rapidly-advancing technologies and the commodification of user data. In the past, consumer rights and protections have lagged behind innovation.
“The best and most recent tech/privacy analogies might be the internet and consumer genetic revolutions, which largely went unchecked,” Pauzauskie said.
A similar arc could follow unchecked advancements in the collection and commodification of consumer brain data. Hacking, corporate profit motives, ever-changing privacy agreements for users, and narrow to no laws covering the data, are all major risks, Pauzauskie said. Under the Colorado Privacy Act, brain data is extended the same privacy rights as fingerprints.
According to Professor Farinaz Koushanfar and Associate Professor Duygu Kuzum of the department of Electrical and Computer Engineering at UC San Diego, it is still too early to understand the limitations of the technology, as well as the depths of the potentially intrusive data collection.
Tracking neural data could mean tracking a broad range of cognitive processes and functions, including thoughts, intentions, and memories, they wrote in a joint statement sent via email. At one extreme, tracking neural data might mean accessing medical information directly.
The broad range of possibilities is itself an issue. “There are too many unknowns still in this field and that’s worrisome,” they wrote.
If these laws become widespread, companies may have no choice but to overhaul their current organizational structure, according to Koushanfar and Kuzum. There may be a need for establishing new compliance officers, and implementing methods such as risk assessment, third-party auditing and anonymization as mechanisms for establishing requirements for the entities involved.
On the consumer side, the Colorado law and any subsequent efforts represent important steps toward better educating users, as well as giving them the required tools to check and exercise their rights should they be infringed.
“The privacy law [in Colorado] regarding neurotechnology might stand as a rare exception, where rights and regulations precede any widespread misuse or abuse of consumer data,” Pauzauskie said.
A soldier walks next to a Tesla Cybertruck, which was donated to the National Guard, after powerful winds fueling devastating wildfires in the Los Angeles area forced people to evacuate, in the Pacific Palisades neighborhood on the west side of Los Angeles, California, U.S. Jan. 13, 2025.
Daniel Cole | Reuters
Tesla started offering discounts on new Cybertruck vehicles in its inventory this week, according to listings on the company’s website.
Discounts are as high as $1,600 off new Cybertrucks, with the reduced price depending on configuration, and up to around $2,600 for demo versions of the trucks in inventory, the listings show. Production of the angular, unpainted steel pickups has reportedly slowed in recent weeks at Tesla’s factory in Austin, Texas.
Deliveries of the unconventional pickup began reaching customers in 2023. CEO Elon Musk originally unveiled the Cybertruck in 2019 and said it would cost around $40,000, but its base price in the U.S. was closer to $80,000 over the course of 2024.
Wall Street previously viewed the Cybertruck as an important driver of growth for Tesla’s core automotive sales.
While the Cybertruck outsold the Ford Lightning F-150 last year in the U.S. and became the fifth best-selling EV domestically, according to data tracked by Cox Automotive, its high price, repeat recalls and production issues in Austin hampered growth. In November, Tesla initiated its sixth recall in a year to replace defective drive inverters.
As CNBC previously reported, Tesla’s deliveries declined slightly year-over-year in 2024, even as EV demand worldwide reached a record. A slew of new competitive models from a wide range of automakers eroded Tesla’s market share.
According to Cox data, full-year EV sales reached an estimated 1.3 million in 2024 in the U.S., an increase of 7.3% from the prior year. But Tesla’s sales for the year declined by about 37,000 vehicles.
The Tesla Model Y SUV and Model 3 sedan ranked as the top two best-selling EVs by a wide margin. But both older, more affordable Tesla models saw sales drop from the previous year. Cox estimated Tesla sold around 38,965 Cybertrucks in the U.S. last year.
In recent days, Musk apologized to customers in California for delays in delivering their Cybertrucks. He said the trucks are now being used to bring supplies and wireless internet service to people in Los Angeles impacted by devastating wildfires.
“Apologies to those expecting Cybertruck deliveries in California over the next few days,” Musk wrote on X. “We need to use those trucks as mobile base stations to provide power to Starlink Internet terminals in areas of LA without connectivity. A new truck will be delivered end of week.”
David Solomon, CEO of Goldman Sachs, speaks during the Reuters NEXT conference, in New York City, U.S., December 10, 2024.
Mike Segar | Reuters
Goldman Sachs CEO David Solomon says there’s an end in sight to the multi-year IPO drought.
“It’s going to pick up,” Solomon said on Wednesday, in an on-stage interview with Cisco CEO Chuck Robbins at a summit hosted by the computer networking company in Silicon Valley. “It’s been slow, it’s been turned off.”
Solomon, who flew to California for the event just after his Wall Street bank reported fourth-quarter results that blew past analysts’ estimates, said the capital markets broadly are showing signs of life ahead of President-elect Donald Trump’s inauguration next week.
The tech IPO market has largely been dormant since the end of 2021, when tech stocks started falling out of favor due to soaring inflation and rising interest rates. Mergers and acquisitions have been difficult in technology because of hefty regulation that’s restricted the ability for the biggest companies to grow through dealmaking.
Solomon said the mood is changing, and he expects momentum M&A as well as in IPOs.
“We have a more constructive kind of optimism, which always helps,” Solomon said. He later added that, “broadly speaking, I think it’s an improved business environment.”
Earlier in the day, Solomon said on his company’s earnings call that Trump’s election and a swing back to Republican power in Washington is already starting to make an impact in the business world. He noted on the call that “there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improved regulatory backdrop.”
Solomon’s comments on the call and at the Cisco event came on a day when the S&P 500 posted his biggest gain since November, helped by a tame inflation report and Goldman’s results. Goldman’s stock popped 6% on Wednesday.
While the stock market has had a strong two-year run and the S&P 500 and Nasdaq hit fresh records last month, IPOs have yet to see a resurgence. Cloud software vendor ServiceTitan debuted on the Nasdaq in December, marking the first significant venture-backed IPO in the U.S. since Rubrik in April.
“The values came down after 2021, people are growing back into those values,” Solomon said at the Cisco summit.
Some companies have said they’re ready. Chipmaker Cerebras filed to go public in September, but the process was slowed down due to a review by the Treasury Department’s Committee on Foreign Investment in the U.S., or CFIUS. In November, online lender Klarna said it had confidentially filed IPO paperwork with the SEC.
Though he’s bullish about what’s coming, Solomon said that there are structural reasons not to go public. He said 25 years ago there were roughly 13,000 public companies in the U.S., and today that number has come down to 3,800. There are higher standards around disclosure for being public, and there’s now tons of private capital available “at scale.”
“It’s not fun being a public company,” Solomon acknowledged. “Who would want to be a public company?”
WATCH: Goldman Sachs tops estimates
Dado Ruvic | Reuters
If TikTok does indeed go dark on Sunday for Americans, there may be a tool for them to continue accessing the popular social app: VPNs.
The Chinese-owned app is set to be removed from mobile app stores and the web for U.S. users on Sunday as a result of a law signed by President Joe Biden in April 2024 requiring that the app be sold to a qualified buyer before the deadline.
Barring a last-minute sale or reprieve from the Supreme Court, the app will almost certainly vanish from the app stores for iPhones and Android phones. It won’t be removed from people’s phones, but the app could stop working.
TikTok plans to shut its service for Americans on Sunday, meaning that even those who already have the app downloaded won’t be able to continue using it, according to reports this week from Reuters and The Information. Apple and Google didn’t comment on their plans for taking down the apps from their app stores on Sunday.
“Basically, an app or a website can check where users came from,” said Justas Palekas, a head of product at IProyal.com, a proxy service. “Based on that, then they can impose restrictions based on their location.”
Masking your physical internet access point
That may stop most users, but for the particularly driven Americans, using VPNs might allow them to continue using the app.
VPNs and a related business-to-business technology called proxies work by tunneling a user’s internet traffic through a server in another country, making it look like they are accessing the internet from a location different than the one they are physically in.
This works because every time a computer connects to the internet, it is identified through an IP number, which is a 12-digit number that is different for every single computer. The first six digits of the number identifies the network, which also includes information about the physical region the request came from.
In China, people have used VPNs for years to get around the country’s firewall, which blocks U.S. websites such as Google and Facebook. VPNs saw big spikes in traffic when India banned TikTok in 2020, and people often use VPNs to watch sporting events from countries where official broadcasts aren’t available.
As of 2022, the VPN market was worth nearly $38 billion, according to the VPN Trust Initiative, a lobbying group.
“We consistently see significant spikes in VPN demand when access to online platforms is restricted, and this situation is no different,” said Lauren Hendry Parsons, privacy advocate at ExpressVPN, a VPN provider that costs $5 per month to use.
“We’re not here to endorse TikTok, but the looming U.S. ban highlights why VPNs matter— millions rely on them for secure, private, and unrestricted access to the internet,” ProtonVPN posted on social media earlier this week. ProtonVPN offers its service for $10 a month.
The price of VPNs
Both ExpressVPN and ProtonVPN allow users to set their internet-access location.
Most VPN services charge a monthly fee to pay for their servers and traffic, but some use a business model where they collect user data or traffic trends, such as when Meta offered a free VPN so it could keep an eye on which competitors’ apps were growing quickly.
A key tradeoff for those who use VPN is speed due to requests having to flow through a middleman computer to mask a users’ physical location.
And although VPNs have worked in the past when governments have banned apps, that doesn’t ensure that VPNs will work if TikTok goes dark. It won’t be clear if ExpressVPN would be able to access TikTok until after the ban takes place, Parsons told CNBC in an email. It’s also possible that TikTok may be able to determine Americans who try to use VPNs to access the app.
(L-R) Sarah Baus of Charleston, S.C., holds a sign that reads “Keep TikTok” as she and other content creators Sallye Miley of Jackson, Mississippi, and Callie Goodwin of Columbia, S.C., stand outside the U.S. Supreme Court Building as the court hears oral arguments on whether to overturn or delay a law that could lead to a ban of TikTok in the U.S., on January 10, 2025 in Washington, DC.
Andrew Harnik | Getty Images
VPNs and proxies to evade regional restrictions have been part of the internet’s landscape for decades, but their use is increasing as governments seek to ban certain services or apps.
Apps are removed by government request all the time. Nearly 1500 apps were removed in regions due to government takedown demands in 2023, according to Apple, with over 1,000 of them in China. Most of them are fringe apps that break laws such as those against gambling, or Chinese video game rules, but increasingly, countries are banning apps for national security or economic development reasons.
Now, the U.S. is poised to ban one of the most popular apps in the country — with 115 million users, it was the second most downloaded app of 2024 across both iOS and Android, according to an estimate provided to CNBC from Sensor Tower, a market intelligence firm.
“As we witness increasing attempts to fragment and censor the internet, the role of VPNs in upholding internet freedom is becoming increasingly critical,” Parsons said.
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