FTC Cracks Down on GM for Secretly Selling Driver Data Without Consent

The Federal Trade Commission (FTC) has recently penalized General Motors (GM.US) and its subsidiary OnStar for selling customer location and driving behavior data without consent. This enforcement action includes a five-year prohibition on the company from disclosing user data to consumer reporting agencies.

An investigation revealed that GM had been secretly collecting detailed data on customers’ driving habits—such as pedal use and travel patterns—and selling this information to insurance companies and data brokers like LexisNexis and Verisk. This unauthorized data utilization led to unexpected increases in many customers' insurance rates, who were unaware of the monitoring and sharing of their driving behaviors.

Lina M. Khan, FTC Chair, stated that GM's monitoring and selling of precise geolocation and driving behavior information was alarmingly frequent, sometimes occurring every three seconds. The agency's action aims to safeguard Americans' privacy and protection from unrestricted surveillance. Under the settlement, GM must now obtain explicit customer consent before collecting driving behavior data and allow drivers the option to limit or delete their data as desired.

In response to the settlement, GM affirmed that it had already ceased its smart driving program as of the previous year, canceling customer enrollments and terminating its third-party telematics partnerships with LexisNexis and Verisk. The company emphasized the importance of respecting customer privacy and maintaining customer trust.

The settlement also includes comprehensive measures for GM to enhance transparency and consumer choice in managing connected vehicle data. The FTC noted that GM previously encouraged customers to subscribe to the OnStar system for assessing their driving habits without clearly disclosing the nature of the collected data or its sale.

Additionally, the FTC highlighted that the registration process for GM’s services was misleading and confusing, as some consumers were unaware of their enrollment in data collection services. This settlement aims to ensure that GM improves its practices to offer greater clarity and choice to its users regarding data collection, usage, and sharing.