FTC Bans GM from Selling Driver Data for 5 Years
The Federal Trade Commission (FTC) has taken action against General Motors (GM) and its subsidiary OnStar for allegedly sharing customer data without consent. The move follows an investigation prompted by a report from The New York Times revealing that GM collected detailed information about customers' driving habits and sold it to third-party platforms used by insurance companies.
What Happened?
The controversy centers on the OnStar Smart Driver program, which collected data on behaviors such as hard braking, speeding, and nighttime driving. Customers were often unaware they had agreed to participate or didn’t fully understand the program’s data-sharing implications. This data was reportedly sold to brokers like LexisNexis Risk Solutions and Verisk, who then provided it to insurance companies.
According to the FTC, GM and OnStar tracked and sold customers’ geolocation and driving behavior data, sometimes as frequently as every three seconds.
FTC Investigation and Settlement
After the revelations, GM stated it had stopped sharing sensitive data with LexisNexis and Verisk. However, the FTC moved forward with its investigation, culminating in a proposed settlement announced today.
Key points of the settlement include:
- Data Sharing Ban: GM and OnStar are prohibited from sharing geolocation and driver behavior data with consumer reporting agencies for the next five years.
- Increased Transparency: Both companies must implement measures to give customers clearer information and choices about how their data is collected and shared.
- Privacy Protections: The settlement aims to safeguard customer data and prevent future violations.
FTC Chair Lina M. Khan emphasized the importance of protecting consumer privacy, stating, “GM monitored and sold people’s precise geolocation data and driver behavior information. With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance.”
The Broader Impact
This case highlights growing concerns about data privacy and surveillance in the automotive industry. As cars become increasingly connected, companies are collecting more data than ever before, raising questions about how that data is used and shared.
The FTC’s action sends a strong message to the industry: companies must prioritize transparency and respect customer consent when handling sensitive data. For consumers, it underscores the importance of understanding privacy policies and actively managing consent agreements.
Looking Ahead
As connected vehicles continue to evolve, scrutiny over data privacy practices is expected to increase. This case may serve as a precedent for future regulatory actions, pushing companies to adopt stricter data protection measures and prioritize customer trust.
