GM banned from selling driving data for five years.
Customers were surprised to see that their insurance rates had increased.
General Motors, along with its subsidiary OnStar, has been banned from selling customer geolocation and driving behavior data for a period of five years. This decision was announced by the Federal Trade Commission (FTC) following an investigation that revealed GM had been collecting detailed information about its users' driving habits. This information included data such as acceleration, braking, and trip duration, which were sold to insurance companies and external data brokers like LexisNexis and Verisk.
Many vehicle owners found themselves bewildered to see their insurance premiums rising without a clear explanation. One customer expressed dissatisfaction by pointing out that they had not been informed that their data would be reported to third parties when signing up for the OnStar service, stating: “Now you make me pay more to my insurance company.”
The FTC accused GM of employing a “deceptive enrollment process” to lure customers into its connected vehicle service OnStar and the Smart Driver feature. According to the FTC, GM did not inform consumers about the collection of their data nor did it seek their consent to sell such information. Following the exposure of the matter, GM announced the discontinuation of its OnStar Smart Driver program.
Lina Khan, chair of the FTC, stated that “GM monitored and sold accurate geolocation information about individuals and data regarding their driving behavior, sometimes every three seconds.” With this action, the FTC seeks to protect the privacy of Americans and safeguard individuals from unchecked surveillance.
The resolution also imposes on GM the obligation to obtain customer consent before collecting data on their driving behavior. Additionally, users will have the option to request and delete their information if they wish. GM, in an unsigned statement, claimed that it is committed to the privacy of its customers.
