User privacy concerns are widely regarded as a key obstacle to the success of modern smart cyber-physical systems. In this paper, we analyse, through an example, some of the requirements that future data collection architectures of these systems should implement to provide effective privacy protection for users. Then, we give an example of how these requirements can be implemented in a smart home scenario. Our example architecture allows the user to balance the privacy risks with the potential benefits and take a practical decision determining the extent of the sharing. Based on this example architecture, we identify a number of challenges that must be addressed by future data processing systems in order to achieve effective privacy management for smart cyber-physical systems.
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