General Motors and its subsidiary OnStar are banned from selling customer geolocation and driving behavior data for five years, the Federal Trade Commission announced Thursday.
The settlement comes after a New York Times investigation found that GM had been collecting micro-details about its customers’ driving habits, including acceleration, braking, and trip length — and then selling it to insurance companies and third-party data brokers like LexisNexis and Verisk. Clueless vehicle owners were then left wondering why their insurance premiums were going up.
For example, one consumer told a GM customer service representative that “[w]hen 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.”
FTC accused GM of using a “misleading enrollment process” to get vehicle owners to sign up for its OnStar connected vehicle service and Smart Driver feature. The automaker failed to disclose to customers that it was collecting their data, nor did GM seek out their consent to sell it to third parties. After the Times exposed the practice, GM said it was discontinuing its OnStar Smart Driver program.
“GM monitored and sold people’s precise geolocation data and driver behavior information, sometimes as often as every three seconds,” FTC Chair Lina Khan said in a statement. “With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance.”
The settlement also requires GM to obtain consent from customers before collecting their driving behavior data, and allow them to request and delete their data if they choose.
GM said in an unsigned statement that it was committed to customer privacy.
