The Federal Trade Commission (FTC) has initiated action against General Motors (GM) and its subsidiary OnStar over allegations of unauthorized collection, use, and sale of drivers' precise geolocation data and driving behavior information. The FTC claims that this data was used to set insurance rates without adequately informing consumers or obtaining their consent.
A proposed order aims to settle these allegations by prohibiting GM, General Motors Holdings LLC, and OnStar LLC from disclosing sensitive consumer data to reporting agencies for five years. The companies are also required to enhance transparency and offer consumers more control over their vehicle data. This marks the FTC's first case related to connected vehicle data.
According to the FTC's complaint, GM employed a misleading enrollment process for its OnStar service and Smart Driver feature. It is alleged that GM did not clearly inform consumers about collecting and selling their geolocation and driving behavior data to third parties without consent.
"GM monitored and sold people’s precise geolocation data and driver behavior information, sometimes as often as every three seconds," stated FTC Chair Lina M. Khan. "With this action, the FTC is safeguarding Americans’ privacy and protecting people from unchecked surveillance."
OnStar has been marketed as a service providing emergency assistance, hands-free voice help, real-time traffic updates, and navigation. Over time, it began collecting detailed geolocation data at frequent intervals for some users.
Consumers purchasing GM vehicles were encouraged to sign up for OnStar services under the premise of assessing driving habits through the Smart Driver feature. However, the FTC alleges that many consumers were unaware they had enrolled in this feature due to a confusing process.
The complaint further accuses GM of failing to disclose that collected data would be sold to consumer reporting agencies who compile credit reports used by insurers in setting rates. Many customers reportedly complained after discovering their driving habits influenced insurance costs.
The proposed order seeks several changes:
- Prohibiting disclosure of driver data: Bans sharing consumer location or behavior information with reporting agencies for five years.
- Requiring consent before collection: Mandates explicit consumer approval before gathering vehicle-related data.
- Allowing access and deletion: Consumers must be able to request copies of their data or have it deleted.
- Limiting vehicle-based collection: Provides options for disabling precise location tracking if technology permits; allows opting out with exceptions.
During a closed meeting, the Commission voted 3-0-2 in favor of accepting the proposal for public comment; Commissioners Melissa Holyoak and Andrew N. Ferguson were absent.
The agreement will soon be published in the Federal Register with a 30-day public comment period before deciding on finalization. Comments can be submitted following instructions in the notice once available online at Regulations.gov.
An administrative complaint indicates potential legal violations warranting proceedings deemed publicly beneficial by the Commission; finalized consent orders carry legal weight against future breaches incurring penalties up to $51,744 per violation.
Leading staff attorneys on this matter include Amy Teng, Breena Roos, and Sarah Shifley from the FTC’s Northwest Regional Office.
The Federal Trade Commission promotes competition while protecting consumer interests through education initiatives; learn more at consumer.ftc.gov or report issues via ReportFraud.ftc.gov.
