General Motors Hit With 5-Year Data Ban


An early ad for GM's Smart Driver program promised drivers insurance discounts.

In the final days under the leadership of Lina Khan, the U.S. Federal Trade Commission has hit General Motors with a hefty ban based on abuse of the auto giant’s “Smart Driver” program.

GM is prohibited from disclosing any personal data, including geolocation and driver behavior data, for the next five years, even if consumers have consented.

The FTC’s ban comes after revelations last year that GM and its OnStar division had collected, used, and sold millions of drivers’ precise geolocation and driving behavior information from millions of vehicles without telling them or without receiving permission.

That information is used to set insurance rates.

It’s the first time the FTC has taken any actions related to connected vehicle data.

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“GM monitored and sold people’s precise geolocation data and driver behavior information, sometimes as often as every three seconds,” said FTC chair Lina M. Khan in the announcement. “With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance.”

The FTC says GM often misled consumers about the On Star program and that many people had signed up for the Smart Driver feature without being aware of it. And many believed signing up for the program would lower their insurance rates.

As a result, information about an individual’s driving behavior -- such as hard braking, speeding and late-night driving -- was sold to consumer reporting agencies. Insurance companies used that information to deny coverage or raise rates.

The practice came to light last spring due to New York Times coverage. GM shuttered the program the following month.

In a statement confirming the settlement, GM says it is working toward simplifying privacy policies.

“Although Smart Driver was created to promote safer driving behavior, we ended that program due to customer feedback,” the company says. “Last year, we discontinued Smart Driver across all GM vehicles, unenrolled all customers, and ended our third-party telematics relationships with LexisNexis and Verisk.”

How badly the ban may reflect on GM remains to be seen, reports Fortune.

It notes that while consumer advocates in Europe have gone to court to prevent exploitation of their data by companies like Apple, Google and Meta, “Americans have a reputation for being more relaxed about their data, since many see leaving their digital fingerprints everywhere as an opportunity to gain valuable services.”

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