GM's Data Privacy Settlement: A New Era for Consumer Trust

General Motors (GM) has reached a significant settlement with the Federal Trade Commission (FTC) over allegations that the automaker collected, used, and sold drivers' precise geolocation data and driving behavior information without adequate consent. This settlement marks a turning point for GM and the automotive industry, as it emphasizes the importance of consumer privacy and trust in the digital age.



The FTC's complaint alleged that GM used a misleading enrollment process to sign up customers for its OnStar connected vehicle service and the OnStar Smart Driver feature. GM failed to clearly disclose that it was collecting consumers' geolocation and driving behavior data and selling it to third parties, including consumer reporting agencies, without their consent. This practice allowed insurance companies to use the data to set rates and deny coverage.

As part of the settlement, GM will be banned for five years from disclosing consumers' sensitive geolocation and driver behavior data to consumer reporting agencies. Additionally, GM must obtain affirmative express consent from consumers prior to collecting connected vehicle data, with some exceptions such as providing location data to emergency first responders. The company must also allow consumers to request a copy of their data and seek its deletion, as well as limit data collection from their vehicles if their vehicle has the necessary technology.

GM has already taken steps to address consumer privacy concerns, discontinuing the OnStar Smart Driver program last year and ending its third-party telematics relationships with LexisNexis and Verisk. The company has also consolidated many of its U.S. privacy statements into a single, simpler statement as part of its broader work to keep raising the bar on privacy.

This settlement sends a clear message to the automotive industry and other companies that collect and use consumer data: transparency and consent are crucial for maintaining consumer trust. By implementing these new privacy measures, GM is demonstrating its commitment to protecting consumer privacy and rebuilding trust with its customers.

In the long term, this settlement could have positive financial implications for GM. By addressing consumer privacy concerns and rebuilding trust, the company may see an increase in customer loyalty and market share. Additionally, the settlement allows GM to avoid potential fines and penalties that could have resulted from further violations of consumer privacy laws.

However, GM must remain vigilant in ensuring that it complies with the terms of the settlement and continues to prioritize consumer privacy. Failure to do so could result in additional fines, penalties, and damage to the company's reputation.

In conclusion, GM's data privacy settlement with the FTC marks a new era for consumer trust in the automotive industry. By implementing stricter privacy measures and prioritizing transparency and consent, GM is demonstrating its commitment to protecting consumer privacy and rebuilding trust with its customers. This settlement serves as a reminder to all companies that collect and use consumer data of the importance of transparency, consent, and consumer trust in the digital age.