According to its current privacy policy, with an account, Hue gets access to the configuration of your system to provide the right software updates to the devices. It can only use your data for marketing or share it with third parties if you provide additional consent.
However, in a change to the current policy, Yianni says Hue will not collect usage information from users without additional optional consent. “So, we do not require users share anything about how they use our products,” he says.
“Previously creating an account was consent for usage data processing that we are in the process of decoupling and will be decoupled before accounts become essential — that makes sure it’s possible to create an account without sharing usage data,” says Yianni. However, if you choose to use the cloud services for things like out-of-home connectivity, you will need an account, and Hue will process your data, he says.
If this change to the privacy policy does happen, Home Assistant’s Schoutsen agrees that it would make the requirement for an account more palatable. “But it all depends on the exact changes,” he says.
I gave them a crap review in the Android app store because of it – I have absolutely no need for my lights to be able to be controlled over the internet outside of my house, and I don't want the feature nor do I want my hue bulbs connected via any stupid cloud link so they COULD be managed over the internet outside of my house. Their response was "as we add new features, so too do we add new security features to protect the platform and that justifies us requiring you to have a login and make your devices controllable via the cloud". Uh huh.
I've set the Android app to never automatically update in the future and I'm really hopeful that I can avoid this garbage requirement by doing so, but I'm sure they've thought of it and I'm going to end up having to move to 3rd party apps to control them eventually.