General Motors Under Fire for Selling Driver Data: Legal Actions and Ethical Implications

January 17, 2025

General Motors has come under scrutiny for selling driver data, including geolocation and driving behavior, without proper consent. Learn about the legal actions, the FTC’s settlement, and its implications for data privacy in the automotive industry.

In a significant move to protect consumer privacy, the Federal Trade Commission (FTC) has imposed a five-year ban on General Motors (GM) and its subsidiary, OnStar, from sharing drivers' geolocation and driving behavior data with consumer reporting agencies. This action addresses allegations that GM collected and sold such data without obtaining proper consumer consent.

How GM Collected and Sold Driver Data

GM, through its OnStar services, gathered detailed information on drivers, including precise geolocation and specific driving habits such as instances of hard braking, speeding, and late-night driving. This data collection occurred as frequently as every three seconds. The company then sold this information to consumer reporting agencies, which compiled it into credit reports and provided it to insurance companies. Consequently, insurers used these reports to adjust or even deny insurance rates for consumers, often without their knowledge. Read more about this development on AP News.

Legal Actions and Settlements

The FTC's investigation revealed that GM employed deceptive enrollment practices for its OnStar services, leading consumers to unwittingly consent to data collection. In response to these findings, GM has discontinued its Smart Driver feature and terminated relationships with third-party data brokers. The settlement requires GM to obtain explicit consent from consumers before collecting their data and to provide options for data deletion or limitation. Additional details are available on Reuters.

This federal action follows a lawsuit filed by Texas Attorney General Ken Paxton, who alleged that GM illegally collected and sold data from over 1.8 million Texas drivers without their knowledge or consent. The lawsuit claimed that GM's practices violated Texans' privacy rights and state laws. Learn more on Compliance Point.

Implications for Consumers and the Automotive Industry

These developments underscore the growing concerns over data privacy in the era of connected vehicles. As cars become more integrated with technology, the potential for misuse of collected data increases. The FTC's actions against GM set a precedent for how automakers must handle consumer data, emphasizing the necessity for transparency and consumer consent. This case serves as a reminder for consumers to be vigilant about the data their vehicles collect and to stay informed about how that information is used.