The Federal Trade Commission (FTC) has announced a five-year ban on General Motors (GM) from selling drivers’ behavior and geolocation data to consumer reporting agencies. This decision follows an investigation revealing that consumers were largely unaware their driving data was being shared with third-party data brokers.
Investigation Reveals Unnotified Data Sharing
The Federal Trade Commission determined that GM had collected data from millions of vehicles without properly notifying drivers or obtaining clear consent. The data, gathered from customers enrolled in GM’s OnStar Connected Services with the Smart Driver feature activated, included details such as speeding habits, hard braking, and nighttime driving patterns.
Federal regulators found the enrollment process so unclear that many drivers did not realize they were agreeing to the data collection when activating the Smart Driver feature. This collected data was sold to consumer reporting agencies, which used the information to compile risk profiles. These profiles were later used by insurance companies to adjust premiums, with some drivers experiencing rate increases as a result.
FTC Chair Lina M. Khan emphasized that the action taken by the agency is intended to safeguard consumer privacy and protect individuals from unchecked data surveillance.
Data Collection Program Discontinued
In response to the investigation, GM has already terminated the data collection program, citing customer feedback as a key factor in the decision. The company stated that customers now have the ability to access and delete their personal information through a designated form available on GM’s website.
Following the initial revelations, GM stopped sharing data with two data brokers—LexisNexis Risk Solutions and Verisk—both of which work closely with the insurance industry.
Terms of the Federal Trade Commission Settlement
The settlement prohibits GM from sharing individual driver data with consumer reporting agencies for five years. However, automakers can still share anonymized driving data with third parties, such as road safety researchers.
Additionally, the agreement requires GM to implement clearer data transparency practices. The company must simplify the process for drivers to disable vehicle location tracking and provide options for drivers to access and delete previously collected data.
Consumer Privacy and Corporate Accountability
The settlement underscores the growing regulatory focus on corporate data practices, especially those involving sensitive personal information. The FTC’s action aims to ensure that companies maintain transparency when collecting consumer data and obtain proper consent before sharing it with third parties.
As part of the settlement, General Motors is required to adopt clearer disclosures and better safeguards to prevent the unauthorized sharing of driver information in the future. This move sets a precedent for how automakers and other industries should handle consumer data collection and privacy protection.
The five-year ban reflects an effort to promote stronger consumer data rights while holding corporations accountable for privacy violations. Moving forward, automakers and tech companies alike will be under increasing scrutiny to prioritize data security and user consent in their operations.
