General Motors and its subsidiary OnStar will be banned from selling customer driving data for the next five years, the Federal Trade Commission announced Thursday.
The agency accuses GM of not clearly disclosing its data-collection policies to users who signed up for its OnStar service and the Smart Driver program.
The Smart Driver program offered “insights on your driving behavior [to] help you recognize driving improvement opportunities” for things like hard braking, late-night driving, and speeding. However, “GM failed to clearly disclose that it collected consumers’ precise geolocation and driving behavior data and sold it to third parties, including consumer reporting agencies, without consumers’ consent,” the FTC says.
In some cases, that information was used to increase insurance premiums, as The New York Times first reported last year.
The sign-up screen required people to accept the terms for two programs at once: to enroll in OnStar Smart Driver and to receive safety and diagnostic alerts about the vehicle. Drivers could not consent to only one feature, the FTC says.
Many customers who found out about these practices later complained to the automaker. One of them told a customer service rep: “When I signed up for this, it was so OnStar could track me. They said nothing about reporting it to a third party. Nothing. […] You guys are affecting our bottom line. I pay you, now you’re making me pay more to my insurance company.”
According to FTC Chair Lina Khan, GM monitored and sold data “sometimes as often as every three seconds.”
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The FTC’s Thursday order prohibits GM from misrepresenting information about how it collects and uses driver data. The company is also barred from selling consumers’ geolocation and driver behavior data to third-party agencies.
The order requires GM to collect connected vehicle data only after receiving “affirmative express consent” from consumers. Additionally, GM must allow consumers to stop sharing their precise location and driver behavior data. GM is also required to establish a provision for US customers to view their data and request its deletion.
Last year, Sens. Ron Wyden (D-Oregon) and Edward Markey (D-Mass.) asked the FTC to investigate how automakers collect and disseminate driver data and called out Honda and Hyundai for similar practices. In a statement, Sen. Wyden said, “FTC Chair Lina Khan is the Steph Curry of privacy regulators with this buzzer-beating settlement to protect Americans privacy against automakers who sold detailed location data to insurance companies.”
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