The Federal Trade Commission is taking action against General Motors and OnStar over allegations they collected, used, and sold drivers’ precise geolocation data and driving behaviour information from millions of vehicles—data that can be used to set insurance rates—without adequately notifying consumers and obtaining their affirmative consent.
Under a proposed order settling the FTC’s allegations, General Motors LLC, General Motors Holdings LLC, and OnStar LLC, which General Motors Company owns, will be banned for five years from disclosing consumers’ sensitive geolocation and driver behaviour data to consumer reporting agencies.
They also must take other steps to provide greater transparency and choice to consumers over the collection, use, and disclosure of their connected vehicle data. This is the FTC’s first action related to connected vehicle data.
In its complaint, the FTC alleged that Michigan-based GM used a misleading enrollment process to get consumers to sign up for its OnStar-connected vehicle service and the OnStar Smart Driver feature. GM failed to clearly disclose that it collected consumers’ precise geolocation and driving behaviour data and sold it to third parties, including consumer reporting agencies, without consumers’ consent.
“GM monitored and sold people’s precise geolocation data and driver behaviour information, sometimes as often as every three seconds,” said FTC Chair Lina M. Khan. “With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance.”
GM has offered OnStar as a service that will aid consumers during an emergency and provide hands-free voice assistance and real-time traffic and navigation. Over time, the company has increased the amount of data it collects through OnStar to include precise geolocation data collected every three seconds for some users.
Tracking and collecting geolocation data can be extremely privacy-invasive, revealing some of the most intimate details about a person’s life, such as whether they visited a hospital or other medical facility, and exposing their daily routines.
When consumers bought a GM vehicle, they were encouraged to sign up for OnStar and its Smart Driver feature, which they were often told would be used to help them assess their driving habits.
However, the FTC alleged that GM’s enrollment process for the data collection for its OnStar service and Smart Driver feature was confusing and misleading. In fact, some consumers were unaware that they had been signed up for the Smart Driver feature, according to the complaint.
In addition, GM failed to clearly disclose to consumers the types of information it collected through its Smart Driver feature, including that their geolocation and driving behaviour data—such as every instance of hard braking, late-night driving, and speeding—would be sold to consumer reporting agencies.
These consumer reporting agencies used GM’s sensitive information to compile credit reports on consumers, which insurance companies used to deny insurance and set rates.
Many consumers were unaware of these practices and complained to GM after finding out that insurance companies were using their driving habits to set their rates. For example, one consumer told a GM customer service representative that “[w]hen I signed up for this, it was so OnStar could track me. They said nothing about reporting it to a third party. Nothing. […] You guys are affecting our bottom line. I pay you, now you’re making me pay more to my insurance company.”
