GM Hit with FTC Ban Over Secret Driver Data Collection and Sales

GM Hit with FTC Ban Over Secret Driver Data Collection and Sales

FTC Takes Action Against GM and OnStar Over Data Privacy Violations

The Federal Trade Commission (FTC) has launched enforcement action against General Motors (GM) and OnStar for illegally collecting and selling drivers’ sensitive data. The investigation revealed that the companies gathered precise geolocation data every three seconds and tracked driving behavior from millions of vehicles without proper consumer consent.

Key Findings:
– GM and OnStar sold collected data to third parties, including Verisk, LexisNexis, and Jacobs Engineering
– The data influenced insurance rates and coverage decisions
– OnStar’s “Smart Driver” feature was misleadingly presented as a self-assessment tool
– Privacy statements were deemed inadequate and unclear

Proposed Settlement Terms:
1. Five-year ban on sharing geolocation and driving behavior data with consumer reporting agencies
2. Mandatory consumer consent requirement for data collection and sales
3. Deletion of previously collected data unless users opt in
4. Implementation of user-friendly data access and deletion options
5. Simple tracking disable features for consumers
6. Enhanced transparency in data collection practices
7. Limited data collection to essential vehicle services only

The settlement includes potential civil penalties of up to $51,744 per violation, with a 180-day compliance period. This action comes amid broader concerns about automotive data privacy, as evidenced by a parallel lawsuit in Texas against Allstate and its subsidiary Arity for similar privacy violations affecting 45 million Americans.

The enforcement action represents a significant step toward protecting consumer privacy in the automotive industry and establishing clearer guidelines for data collection practices.

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