FTC orders GM to stop collecting and selling driver data
The Federal Trade Commission is taking action against General Motors and OnStar over allegations they collected, used, and sold drivers’ precise geolocation data and driving behavior information from millions of vehicles, which can be used to set insurance rates, without adequately notifying consumers and obtaining their consent.
Under a proposed order settling the FTC’s allegations, the General Motors Company will be banned for five years from disclosing consumers’ sensitive geolocation and driver behavior data to consumer reporting agencies. GM also must take other steps to provide greater transparency and choice to consumers over the collection, use, and disclosure of their connected vehicle data. This is the FTC’s first action related to connected vehicle data.
In its complaint, the FTC alleged that Michigan-based GM used a misleading enrollment process to get consumers to sign up for its OnStar connected vehicle service and the OnStar Smart Driver feature. 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.
GM has offered OnStar as a service that will aid consumers during an emergency and provide hands-free voice assistance and real-time traffic and navigation. Over time, the company has increased the amount of data it collects through OnStar to include precise geolocation data, collected every three seconds for some users, according to the FTC.
When consumers bought a GM vehicle, they were encouraged to sign up for OnStar and its Smart Driver feature, which they were often told would be used to help them assess their driving habits. The FTC alleged, however, that GM’s enrollment process for the data collection for both its OnStar service and Smart Driver feature was confusing and misleading, with some consumers unaware that they had been signed up for the Smart Driver feature.
In addition, GM failed to clearly disclose to consumers the types of information it collected through its Smart Driver feature, including that their geolocation and driving behavior data, such as every instance of hard braking, late night driving, and speeding, would be sold to consumer reporting agencies. These consumer reporting agencies used the information GM provided to compile credit reports on consumers, which were used by insurance companies to deny insurance and set rates.
Earlier this month, Texas Attorney General Ken Paxton sued Allstate and its subsidiary Arity for “unlawfully collecting, using, and selling data” about the location and movement of Texans’ cell phones through “secretly embedded software in mobile apps, such as Life360.”
