FTC finalizes GM punishment over driver information sharing scandal

After reaching a proposed settlement final yr, the FTC has banned Common Motors from sharing particular shopper information with third events, TechCrunch reported. The finalized order wraps up one of many extra egregious circumstances of an organization accumulating its clients’ information after which utilizing it in opposition to them.

Two years in the past, the New York Occasions report launched a report detailing how GM’s OnStar “Good Driver” program collected and bought detailed geolocation and driving conduct information to 3rd events, together with information brokers. These brokers in flip bought the information to insurance coverage suppliers, which jacked up the charges for some drivers based mostly on the information. “It felt like a betrayal,” mentioned a Chevy Bolt proprietor that noticed his insurance coverage rise by 21 p.c based mostly on the information. “They’re taking data that I didn’t notice was going to be shared and screwing with our insurance coverage.”

In accordance with the phrases of the settlement, GM is barred from sharing particular person information with shopper reporting businesses for a 5 yr interval. The automaker can also be required to request person permission earlier than accumulating, utilizing or sharing automobile information with any third occasion. It should do this when a shopper purchases a automotive at a dealership, with the shopper requested in particular person whether or not they agree or not with the information assortment, GM mentioned.

Among the settlement is moot as GM stopped its Good Driver program for all manufacturers in April 2024. The corporate unenrolled all clients and stopped its third-party relationship with LexisNexis and Verisk, the brokers that bought driver information to insurance coverage firms.

GM confronted different actions over the information assortment, together with lawsuits from Texas, Nebraska and different states. “Our investigation revealed that Common Motors has engaged in egregious enterprise practices that violated Texans’ privateness and broke the regulation. We’ll maintain them accountable,” mentioned Texas AG Ken Paxton on the time.

In a press release to TechCrunch, GM mentioned: “The Federal Commerce Fee has formally accepted the settlement reached final yr with Common Motors to deal with issues. As automobile connectivity turns into more and more integral to the driving expertise, GM stays dedicated to defending buyer privateness, sustaining belief, and making certain clients have a transparent understanding of our practices.”