GM Banned from Selling Driving Data for Five Years: FTC Settlement

Federal Trade Commission Bans GM from Selling Customer Data

In a significant move to protect consumer privacy, the Federal Trade Commission (FTC) recently announced a five-year ban on General Motors (GM) and its subsidiary, OnStar, from selling customer geolocation and driving behavior data. This decision follows an investigative report by the New York Times, unveiling GM's extensive data collection practices that included tracking the precise details of customer driving habits.

Details Unveiled by Investigation

The investigation revealed alarming practices as GM collected thorough data regarding vehicle owners' driving behaviors, such as acceleration rates, braking instances, and trip lengths. This data was subsequently sold to various entities, including insurance companies and data brokers like LexisNexis and Verisk. Many customers were bewildered to notice increased premiums on their insurance, unaware that their driving data was being sold without their knowledge.

Consumer Reactions

One consumer expressed their frustration, stating, "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." This sentiment reflects the feelings of many who felt misled by GM's data collection practices.

Misleading Enrollment Process Highlighted

The FTC accused GM of using a misleading enrollment process, urging vehicle owners to subscribe to services without transparently disclosing data collection practices or obtaining consent for selling such data to third parties. Following the public exposure of these practices, GM announced the discontinuation of its OnStar Smart Driver program.

FTC's Stance on Consumer Privacy

FTC Chair Lina Khan emphasized the importance of safeguarding Americans’ privacy stating, "GM monitored and sold people’s precise geolocation data and driver behavior information, sometimes as often as every three seconds. With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance." This highlights the FTC's commitment to reinforcing consumer protection laws as technology evolves.

New Compliance Measures for GM

The settlement not only prohibits GM from selling customer data but also mandates that the company obtains explicit consent before collecting driving behavior data. Additionally, customers will have the right to request and delete their data if they so wish. GM has stated that it is committed to ensuring customer privacy, even as it navigates these new regulations.

Conclusion

This notable decision serves as a critical reminder for all companies regarding the importance of transparency and consumer consent in data collection. As privacy concerns continue to rise, it is essential for companies like GM to adhere strictly to consumer rights and safeguard personal information.

What are your thoughts on consumer data privacy? Are you aware of how companies use your personal data? Share your experiences in the comments below!