The Federal Trade Commission announced Thursday that it had reached an agreement with General Motors prohibiting the automaker from providing driver behavior and geolocation data to consumer reporting agencies. The ban will last five years.
The New York Times reported last year that GM collected data on drivers’ behavior, including how often they drove at high speeds or at night, and sold it to data brokers who generated risk profiles for insurance companies. Some drivers have reported that their car insurance premiums have increased as a result.
“GM monitored and sold precise geolocation data and driver behavior information, sometimes every three seconds,” FTC Chair Lina M. Khan. “With this action, the FTC is protecting Americans’ privacy and protecting people from unchecked surveillance. .”
The FTC opened an investigation and determined that GM collected and sold data from millions of vehicles “without adequately informing consumers or obtaining their affirmative consent.” Drivers who signed up for OnStar connected services and activated a feature called Smart Driver were subject to data collection. But federal regulators said the sign-up process was so confusing that many consumers didn’t realize they had signed up.
“GM has not clearly disclosed to consumers the types of information it collected through its Smart Driver feature, including the fact that their geolocation and driving behavior data – such as each instance of hard braking, nighttime driving and speeding – would be sold to consumer reporting agencies,” the FTC said in a statement. “These consumer reporting agencies used sensitive information provided by GM to compile consumer credit reports, which were used by insurance companies to deny insurance and set rates.”
GM did not immediately respond to a request for comment.
In the weeks following the Times investigation, GM stopped sharing driver information with two data brokers, LexisNexis Risk Solutions and Verisk, that worked with the insurance industry. The five-year ban prohibits GM from sharing information about individual drivers, but it can still share anonymous data about people’s driving with third parties, such as traffic safety researchers.
Ms. Khan, who controlled corporate data collection and the technology industry when she led the FTC, will be replaced as president when the Trump administration takes over next week.
Under the settlement agreement, GM must make it easier for drivers to opt out of tracking their vehicle’s location and allow them to access and delete data the automaker has collected about their driving.
