General Motors banned from selling driving behavior data for five years

The Federal Trade Commission announced Thursday that it has reached a settlement with General Motors that prohibits the automaker from providing driver behavior and location data to consumer reporting agencies. The ban will last for five years.

The New York Times reported last year that GM collects data on people's driving behavior, such as speed and how often they drive at night, and sells it to data brokers that create risk profiles for insurance companies. Some drivers reported seeing their car insurance premiums increase as a result.

“GM was monitoring and selling people's precise geolocation data and driver behavior information, sometimes every three seconds,” FTC Chair Lina M. Khan said. “With this action, the FTC is protecting Americans' privacy and protecting them from unchecked surveillance.” ”

The FTC launched an investigation and found that GM collected and sold data from millions of vehicles “without properly notifying consumers or obtaining their affirmative consent.” Drivers who signed up for OnStar Connected Services and enabled a feature called Smart Driver were subject to data collection. But federal regulators said the registration process was so confusing that many consumers didn't realize they had registered.

“GM did not clearly disclose to consumers the types of information collected through its smart driver features, including geolocation and driving behavior data such as sudden braking, late-night driving, and speeding. “This included being sold to reporting agencies,” the FTC said in a statement. “These consumer reporting agencies used confidential information provided by GM to create credit reports on consumers that were used by insurance companies to deny insurance and set rates.”

GM did not respond to requests for comment.

Weeks after the Times investigation, GM stopped sharing driver information with two data brokers affiliated with the insurance industry, LexisNexis Risk Solutions and Verisk. The five-year ban prohibits GM from sharing information about individual drivers, but it can still share anonymous data about people's driving with third parties such as road safety researchers.

Khan, who cracked down on corporate data collection and the tech industry during his time leading the FTC, will be replaced as chairman when the Trump administration takes office next week.

Under the settlement agreement, GM must make it easy for drivers to turn off location tracking on their vehicles and allow drivers to access and delete data the automaker collects about their driving.