GM's Data-Sharing Practices Under Scrutiny as FTC Finalizes Order
In a major victory for consumer privacy, the Federal Trade Commission (FTC) has finalized an order that bans General Motors and its OnStar telematics service from sharing certain consumer data with credit reporting agencies. This move comes after a year of negotiations between the FTC and GM, which had been accused of using a misleading enrollment process to collect sensitive information from drivers.FTC Allegations Against GM
The FTC alleged that GM and OnStar used a deceptive method to enroll consumers in their connected vehicle service and Smart Driver feature. The agency claimed that the automaker failed to clearly disclose that the collected data would be sold to third parties, including insurance providers who could use it to affect customers' rates. This practice was exposed by a New York Times report in 2024, which revealed how GM's Smart Driver program tracked drivers' precise geolocation data and driving behavior.
GM's Response and Compliance
In response to the allegations, GM discontinued its Smart Driver program across all brands in April 2024. The automaker claimed that it unenrolled all customers and ended its relationships with data brokers LexisNexis and Verisk. However, under the finalized order, GM is required to obtain explicit consent from consumers before collecting, using, or sharing connected vehicle data. This process will occur at the dealership when a consumer purchases a car from a GM brand.
Exceptions to Data Collection Ban
While the order prohibits GM from sharing certain data with credit reporting agencies, there are exceptions. The automaker is allowed to share location data with emergency first responders and for internal research purposes. GM confirmed that it collects data for research and development and sometimes shares de-identified data with select partners to enhance city infrastructure and improve road safety.
Consumer Rights and Data Access
Under the finalized order, GM must establish a process for consumers to request a copy of their data and seek its deletion. Additionally, drivers will have the ability to disable the collection of precise geolocation data from their vehicles. GM claims that it has already complied with these mandates.
The FTC's order marks a significant step towards protecting consumer privacy in the automotive industry. As technology continues to advance and connected cars become increasingly prevalent, it is essential for companies like GM to prioritize transparency and obtain explicit consent from consumers before collecting sensitive information. This move sets a precedent for other automakers and telematics services to follow suit.
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