The combination of hearing aids with entertainment attributes resulted in the creation of smart earwear, or hearables. However, there are stringent regulations in place to classify hearing aids as medical devices.

Regulatory Trends

Listed below are the key regulatory trends impacting the hearables theme, as identified by GlobalData.

Over-the-Counter (OTC) Hearing Aid Act

OTC Hearing Aid Act, ratified by the US in 2017 and currently being readied by the Food and Drug Administration (FDA), will offer a lucrative opportunity for hearable vendors to expand their reach amongst those with hearing disabilities. The Act defines OTC hearing aids as devices that use air conduction to improve hearing among adults with “perceived mild to moderate hearing impairment.”

Apple, Google, Nuheara, Jabra, and Bose are integrating sound amplification into their hearables, alongside entertainment and fitness services, meaning they will offer more features at a lower price than traditional hearing aids. The gap between medical hearing aids and consumer-grade personal sound amplifiers will become increasingly blurred in the coming years.

Data privacy

Hearables have limited capacity to store the data they generate. Thus, vendors store users’ data, such as location, health metrics, app activity, and conversations, on cloud servers. This stored data is open to potential misuse by advertisers and vendors. Data privacy regulations such as the European Union’s (EU’s) General Data Protection Regulation (GDPR), Japan’s Act on the Protection of Personal Information (APPI), and the California Consumer Privacy Act (CCPA) aim to restrict vendors’ ability to sell data for profit without the user’s consent.

The regulations mandate hearables vendors to have transparent privacy policies that stipulate the purpose and use of user-generated data. They must also equip users with the ability to request, access, correct, and suspend their data from privacy centers. Adopting an extraterritorial approach, GDPR and APPI have forced vendors to process locally any data generated within the EU and Japan, respectively, regardless of where the vendors themselves are headquartered.

This is an edited extract from the Hearables – Thematic Research report produced by GlobalData Thematic Research.