FTC bans GM from sharing driving data to settle claims that the automaker sold data without consent

General Motors will be banned for five years from disclosing data that it collects from drivers to consumer reporting agencies as part of a settlement with the government to resolve claims that the automaker shared such data without consumers’ permission.

GM and subsidiary OnStar, which operates a roadside assistance service, will also be banned from sharing drivers’ precise geolocation and other data, and they will be required to provide more transparency and choice over data linked to how consumers use their vehicles, according to a proposed order released by the Federal Trade Commission on Thursday.

In its complaint, the FTC alleged that Detroit-based GM used a misleading enrollment process to get consumers to sign up for OnStar’s services and its Smart Driver feature, which the automaker touted as a tool to help drivers assess their driving habits.

The agency also claims the automaker failed to clearly disclose to consumers that it would collect data on their precise location and driving behavior, and then sell it to third parties.

GM sold the data, including every instance when a driver was speeding or driving late at night, to consumer reporting agencies, which used it to compile credit reports and, ultimately, provided it to insurance companies that used the data to set their rates, the FTC claims.

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

The automaker acknowledged the settlement agreement with the FTC in a statement on its website Thursday, noting that its Smart Driver offering was discontinued last year across all GM vehicles and unenrolled all customers. GM also said it ended its “third-party telematics relationships” with LexisNexis and data broker Verisk Analytics.

The FTC launched its investigation after two U.S. senators called on the agency last July to look into allegations that GM and other automakers were sharing drivers’ data with data brokers.

By ALEX VEIGA
AP Business Writer