General Motors (GM) and its subsidiary OnStar have agreed to a five-year prohibition on selling or sharing sensitive driver data as part of a settlement with the Federal Trade Commission (FTC).
The ban addresses allegations that the automaker collected and sold detailed information about drivers' habits and locations without their permission.
FTC Investigation Reveals GM Sold Driver Behavior Data Without Consent
The FTC investigation revealed that GM used data collected through its OnStar services and the now-discontinued Smart Driver program to sell information about drivers' behavior.
According to AP, this included data on speeding, nighttime driving, and hard braking.
The data was sold to consumer reporting agencies, which used it to create reports for insurance companies. Many drivers were unaware their driving habits were being tracked and shared, often leading to increased insurance premiums.
According to the FTC, GM used deceptive enrollment tactics to get customers to join its programs without fully disclosing how their data would be used. The agency described these actions as a violation of consumer trust and privacy.
Under the settlement, GM must now obtain explicit consent from drivers before collecting or sharing their data. Additionally, customers will be given the option to request the deletion of their information.
GM Ends Smart Driver Program Amid Settlement Over Data Privacy Violations
In response, GM stated that it discontinued the Smart Driver program in 2022 and ended partnerships with data brokers LexisNexis and Verisk Analytics, The Verge said.
The company emphasized its commitment to improving customer privacy and transparency moving forward. GM also pledged to ensure its policies and practices are clear to its customers.
The settlement follows broader concerns about privacy in the automotive industry. Last year, two U.S. senators urged the FTC to investigate automakers' use of driver data. This case highlights growing scrutiny of how companies handle personal information in an increasingly connected world.
FTC Chair Lina Khan criticized GM for its actions, noting that the automaker monitored and sold detailed geolocation and behavior data, sometimes as frequently as every three seconds. She called the settlement a step toward protecting Americans' privacy and limiting corporate overreach.
The settlement also serves as a warning to other automakers and companies that collect sensitive consumer data.
