They say the cars of tomorrow will be like “smartphones on wheels,” and when it comes to the latest electric cars in particular, many of them already exist. But that also means that cars are just as adept at collecting your data as any of your favorite gadgets – and they don’t necessarily have security measures in place where data is stored. which goes there. Now, thank you very much for the report New York Timestwo US senators are urging the government to limit how vehicle data is collected and sold.
Months ago, the The NYT Kashmir Hill—himself a Chevrolet Bolt owner—discovered how his car and others were collecting data on driving habits, ride, acceleration and more, then selling that data to a broker who works with insurance companies. From there, insurance discounts (which have been increasing nationwide) were tailored to the personal habits of drivers, often without their knowledge or with their “consent” hidden in pages of fine print.
Data privacy and the cars of the future
Data privacy is a no-brainer in a world where we sign many online Terms of Service agreements and new products. But the use of driving data to, in some cases, raise insurance rates shows that this has very real consequences. Governments ensure that connected cars will not violate the privacy of drivers in the future?
In the months since that story was published, the other automaker involved, General Motors, said it would end its partnership with LexisNexis and analytics company Verisk. But this weekend, the NOW it also reported that Democratic US Senators Ron Wyden of Oregon and Edward J. Markey of Massachusetts want the Federal Trade Commission to ban the practice for good.
“We are writing to urge the Federal Trade Commission (FTC) to investigate the disclosure by automakers of millions of American driving data to data vendors, and to share new information about the practice revealed in the recent investigation- oversight,” a letter to the FTC. If the FTC determines that these companies have violated the law, we urge you to hold the companies and their executives accountable.”
This letter specifically targets GM, Honda and Hyundai for their data collection and marketing practices. It says GM and Honda’s announcements surrounding a “voluntary program” designed to reduce costs were intentionally “deceptive.” The worst, however, was aimed at Hyundai.
Hyundai enrolled all customers who connected their new car to a driver data program, which included sharing their data with Verisk. $1,043,315.69, or 61 cents per vehicle. Hyundai did not seek informed consent from consumers before sharing their information.
The letter said that Hyundai confirmed the practice, and that it never told customers that their driving behavior data would be sold if they agreed to enable online access. It’s a shame that Hyundai has been focusing on high-tech lately and the fact that it’s making flagship EVs—all of which rely heavily on connected services and features.
GM and Honda told consumers that these “Safe Driver” programs would be used to lower their premiums if they kept that promise. However, apart from the dreaded consent issues, they never guaranteed that the data would be used only that way:
But car manufacturers could not guarantee that this data would only be used by insurance companies to offer discounts and that consumers would not pay more if they had never been enroll in these programs. Additionally, Verisk officials confirmed to Senator Wyden’s office that the company’s contracts with automakers and insurers do not require that driver telematics data be used solely to provide discounts.
Currently, the laws surrounding vehicle data collection methods are, unsurprisingly, based on a patchwork of state-by-state laws. That’s why the two senators are urging a nationwide response by asking the FTC to investigate the practice, which they believe is what they know now:
The difficult practices we have discovered and documented in this letter may be a key point. Companies should not be selling Americans’ data without their consent, period. But it’s pretty insulting for automakers that sell cars for tens of thousands of dollars to squeeze a few pennies of profit out of private customer data.
Spokespeople for these automakers reiterated that NOW that these were opt-in programs, although that does not mean that consumers did not know what they were opting into. A GM official said the company “has been sharing anonymous location information from its vehicles with a company that Mr. Wyden’s office says GM has denied.” And in one case, another data vendor (which has since closed shop) was a company that GM had invested in.
It’s clear that automakers have big plans for your driving data, and their executives do so with big dollar signs in their eyes. But they do this while asking consumers to trust that they can develop the software in the car together with the technology companies—and pay for those parts as well. Certainly not others; Apple says it never sells your data to third parties, but we know there are loopholes in that process too.
But if car companies really want to sell us on a high-tech, connected future, they can’t sell us all at once. And maybe now the US government will have something to say about these plans.
Contact the author: patrick.george@insideevs.com
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