General Motors reaches landmark FTC settlement over driver data sharing allegations

General Motors has agreed to a significant settlement with the Federal Trade Commission (FTC) following accusations that the automaker collected and shared sensitive driver data without clear consumer consent. The case, which centers on GM’s OnStar services and its now-defunct Smart Driver program, highlights pressing concerns about privacy in the era of connected vehicles.

The FTC’s investigation revealed that General Motors failed to properly inform consumers about its data collection practices, including tracking precise geolocation and driving behavior. This information, later sold to third-party entities like LexisNexis and Verisk Analytics, was used by consumer reporting agencies and insurance companies, sometimes leading to unexpected premium increases for unsuspecting drivers.

This settlement marks a turning point for data privacy regulations in the automotive sector, reinforcing the need for transparency and consumer control over personal data.

What Led to the FTC Investigation Into GM?

The controversy stems from General Motors’ OnStar Smart Driver feature, which was marketed as a tool to help consumers assess and improve their driving habits. While the program offered feedback on aspects like braking patterns and speeding, the FTC alleges that GM failed to disclose the extent of data collected and its subsequent sale to third-party entities.

The data collected through the Smart Driver program included precise geolocation information—tracked every three seconds—and details of driving behaviors such as rapid acceleration, hard braking, and late-night travel. These insights were sold to data brokers like LexisNexis and Verisk Analytics, who provided them to insurance companies and other parties.

Consumers were reportedly unaware of these practices, with some unknowingly enrolling in the Smart Driver program due to unclear enrollment processes. As a result, many faced significant increases in insurance premiums without understanding the connection between their driving data and these hikes.

How Did General Motors Respond to Privacy Concerns?

In response to public and regulatory scrutiny, General Motors discontinued the Smart Driver program in 2024, unenrolling all participants and ending its data-sharing agreements with LexisNexis and Verisk Analytics. GM also pledged to enhance its privacy practices, focusing on clearer communication and consumer empowerment.

The automaker consolidated its privacy policies into a single, simplified document and introduced new measures to ensure consumer consent is both informed and explicit. These changes include providing options for drivers to disable geolocation tracking and request the deletion of collected data.

A spokesperson for GM emphasized the company’s commitment to privacy, stating that respecting customer trust is central to its operations.

What Are the Terms of the FTC Settlement?

The settlement imposes several significant obligations on General Motors:

Prohibition on Data Sharing: For five years, GM is barred from sharing geolocation and driving behavior data with consumer reporting agencies.

Enhanced Consumer Transparency: The company must obtain explicit consent before collecting or using connected vehicle data, except in emergencies.

Data Control for Consumers: GM is required to provide tools for drivers to manage their data, including access to disable tracking features and delete stored information.

FTC Chair Lina Khan described the settlement as a pivotal moment in protecting consumer privacy, emphasizing that connected vehicle manufacturers must uphold transparency and accountability in data practices.

How Does This Impact the Automotive Industry?

The case against General Motors sets a significant precedent for how automakers handle connected vehicle data. As vehicles become increasingly equipped with advanced connectivity features, the potential for data misuse grows.

Experts believe this settlement will lead to stricter scrutiny of data collection and sharing practices across the automotive sector. Legal analyst Jonathan Reyes noted that automakers must now proactively adopt privacy-first frameworks to avoid similar regulatory challenges. He stated, “This is a clear signal that consumer privacy cannot be an afterthought. Transparency and consent are non-negotiable.”

Privacy advocate Sarah Nolan added that the case highlights the risks of unchecked data collection, urging automakers to strike a balance between leveraging technology and safeguarding consumer rights.

What Does This Mean for Consumers?

For consumers, the settlement ensures greater control over their personal data. Drivers can now expect clearer information about what data is being collected, how it is used, and whether they can opt out of specific tracking features.

This case also raises awareness about the privacy implications of connected vehicle technologies, prompting drivers to question how their data is handled and advocating for greater transparency from automakers.

The Road Ahead for Connected Vehicles and Privacy

The General Motors settlement underscores the growing importance of privacy in the connected vehicle landscape. As automakers continue to innovate, the onus is on them to ensure that advancements do not come at the cost of consumer trust.

While this case highlights the risks of inadequate data protection, it also serves as a reminder of the industry’s capacity to address these challenges through proactive measures. As regulatory scrutiny increases, automakers must prioritize ethical data practices, making privacy a core component of their business strategies.