General Motors has been prohibited from sharing any driver data collected from their vehicles with consumer reporting agencies for the next five years. This decision comes as part of a settlement with federal authorities, aimed at addressing allegations that GM shared data without the consent of its consumers.
GM and its subsidiary, OnStar, known for its vehicle emergency services, are also forbidden from distributing drivers’ exact geolocation and other sensitive information. Furthermore, they are required to enhance transparency and give consumers more control over their data, following a recently proposed order by the Federal Trade Commission (FTC) on January 16th.
The FTC’s complaint highlighted that GM, headquartered in Detroit, engaged in deceptive practices during the enrollment process for OnStar’s services and its Smart Driver program. GM promoted Smart Driver as a beneficial tool for motorists to evaluate their driving habits.
Additionally, the agency criticized GM for not being upfront with consumers regarding the collection of detailed location and driving behavior data, which was then sold to third parties.
According to the FTC, GM sold this data—including details such as instances of speeding or late-night driving—to consumer reporting agencies. These agencies then used the information to compile credit reports and provided it to insurance companies. These insurers used the data to adjust their premium rates.
“GM monitored and sold people’s precise geolocation data and driver behavior information, sometimes as frequently as every three seconds,” stated FTC Chair Lina Khan. “With this enforcement action, the FTC is protecting American privacy and guarding against unregulated surveillance.”
GM confirmed the settlement on its website on January 16th, acknowledging the discontinuation of its Smart Driver service across all vehicles and the unenrollment of all customers from the previous year. GM also terminated its data-sharing business relationships with third-party telematics providers LexisNexis and Verisk Analytics.
The FTC initiated this investigation following requests from two U.S. senators in July last year, urging the agency to examine allegations that GM, among other car manufacturers, was sharing driver data with data brokerage firms.
Related Topics: GM, FTC
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