General Motors has ended its data selling agreements with LexisNexis and Verisk after a lawsuit highlighted privacy concerns and potential impacts on auto insurance rates for drivers.
KEY IDEAS:
- General Motors was selling driver data to data brokers, which was impacting insurance rates.
- A lawsuit claims GM violated privacy and consumer protection laws by selling driving data without consent.
- The shared data included sensitive information like speeding, braking, and acceleration.
- GM claims consent was obtained three times before sharing data through the OnStar Smart Driver program.
- Using unclear consent for data sharing is widespread across industries.
- Legal experts predict a surge in lawsuits against companies for data privacy breaches.
- Senator Edward Markey called for FTC investigation into automakers' data privacy practices.
- The lawsuit could lead to reevaluating how companies handle and share consumer data.
- GM's decision to stop selling data with brokers may reflect growing consumer privacy concerns.
- The case highlights the tension between technological vehicle advancements and privacy rights.
QUOTES:
- "Sharing data without consent is bad."
- "What GM is doing here is the standard rotten thing that most companies do."
- "Automakers are collecting large amounts of data on drivers, passengers, and even people outside the vehicle, with little to no oversight."
- "Customer trust is a priority for us, and we are actively evaluating our privacy processes and policies."
- "There's a near-term solution that says just drop it."
- "Your car isn't spying on you; it's keeping you safe."
- "It's unclear how GM will continue to use driver data."
- "Driving your car on the open road may feel like one of your last bastions of privacy."
- "Did You Opt Into Being Spied On?"
- "The Price of Customer Trust."
FACTS:
- General Motors severed ties with LexisNexis and Verisk following a lawsuit over privacy concerns.
- Romeo Chicco filed the lawsuit in the U.S. District Court Southern District of Florida.
- GM shared limited data with insurers through a third party after customer consent.
- Senator Edward Markey asked the FTC to investigate automakers' data privacy practices.
- The New York Times investigation found many automakers share customers' driving information with the insurance industry.
- Chicco's lawsuit claims he never consented to sharing his driving data.
- GM's annual earnings filing with the SEC does not break out how much money it makes from selling data.
- The Alliance for Automotive Innovation issued a statement emphasizing carmakers collect data mostly for vehicle safety functions.
- General Motors' revenue from selling customer data is in the "low millions of dollars."
- General Motors' total revenue last year was $172 billion with a gross profit of $19 billion.
REFERENCES:
- Federal Trade Commission's Bureau of Consumer Protection
- OnStar Smart Driver program
- LexisNexis Risk Solutions
- Verisk
- Ross School of Business at the University of Michigan
- Kazerouni Law Group
- The New York Times
- Alliance for Automotive Innovation
- Securities and Exchange Commission
RECOMMENDATIONS:
- Consumers should be aware of the data-sharing practices of companies they engage with.
- Companies should ensure clear and informed consent for any data sharing.
- Automakers should reevaluate their data privacy processes and policies in light of consumer concerns.
- Legal protections should be strengthened to prevent unauthorized sharing of sensitive personal data.
- Consumers should have the option to easily opt-out of data-sharing programs.
- The government should step in to protect consumers against unauthorized data sharing.
- Automakers should prioritize customer trust and privacy over potential revenue from selling data.
- Consumers should be informed about how their data is being used and who it is being shared with.
- Companies should consider the long-term impact on customer trust before selling personal data.
- Legal experts and consumer protection advocates should continue to monitor and challenge questionable data-sharing practices.
SOURCE
https://www.freep.com/story/money/cars/general-motors/2024/03/22/gm-data-firms-lexis-nexis/73057931007/
https://arstechnica.com/cars/2024/03/gm-stops-sharing-driver-data-with-brokers-amid-backlash/
https://www.thedrive.com/news/general-motors-stops-selling-drive-data-to-insurance-data-providers