General Motors and its subsidiary OnStar agreed to a settlement that prohibits them from sharing driver location and behavior data with third parties, the Federal Trade Commission announced yesterday. The proposed settlement comes less than a year after GM responded to public backlash by announcing that it stopped sharing driving data from its connected cars with companies such as LexisNexis.
The FTC said it "is taking action against General Motors (GM) and OnStar over allegations they collected, used, and sold drivers' precise geolocation data and driving behavior information from millions of vehicles—data that can be used to set insurance rates—without adequately notifying consumers and obtaining their affirmative consent." GM did not admit to or deny the allegations.
GM and OnStar "will be banned for five years from disclosing consumers' sensitive geolocation and driver behavior data to consumer reporting agencies," the FTC said. Under the settlement, "consumer reporting agency" means a firm that collects or evaluates "consumer credit information or other information on consumers for the purpose of furnishing consumer reports to other parties and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports."
A New York Times report last year described how the data sharing works. "After LexisNexis and Verisk [a data broker that works with the insurance industry] get data from consumers' cars, they sell information about how people are driving to insurance companies," the NYT report said. "To access it, the insurance companies must get consent from the drivers—say, when they go out shopping for car insurance and sign off on boilerplate language that gives insurance companies the right to pull third-party reports."
A pending class-action lawsuit against GM, OnStar, and LexisNexis alleges that the defendants deceived and harmed consumers.
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