The Federal Trade Commission has finalized a settlement with General Motors and OnStar over allegations that the company sold the driving and location data of millions of motorists to third parties without their permission. The agreement prohibits the automaker from sharing specific driver data with insurance-related agencies for five years and mandates a strict consent process for all data collection over the next two decades.
The Federal Trade Commission recently concluded its legal action against General Motors and its subsidiary OnStar following claims that the company engaged in deceptive data practices. According to the original complaint, the automaker collected precise location information and driving habits from millions of vehicles every few seconds through a feature known as Smart Driver. This program was allegedly presented to consumers as a tool for self-assessment rather than a mechanism for large-scale data harvesting and commercial distribution.
The data gathered through this feature was sold to third-party consumer reporting agencies, which then shared the information with insurance providers. This process had direct financial consequences for many drivers, as the reports were used to justify higher insurance premiums or to deny coverage entirely. The FTC characterized these actions as a significant betrayal of consumer trust, leading to the implementation of strict oversight measures intended to protect vehicle owners from further exploitation.
Under the terms of the finalized order, General Motors is now banned from sharing any geolocation or driving behavior data with consumer reporting agencies for a period of five years. This specific restriction is designed to stop the flow of sensitive information into the insurance market while the company reforms its internal privacy protocols. The order represents a major regulatory shift in how connected vehicle data can be monetized by manufacturers.
Beyond the initial five-year ban, the settlement establishes rules that will remain in effect for twenty years. General Motors is now required to obtain explicit, affirmative consent from customers before collecting, using, or sharing any connected vehicle data, with the exception of essential emergency services. Furthermore, the company must provide a clear way for drivers to opt out of data collection and must allow individuals to request the deletion of their personal information at any time.
General Motors has acknowledged the finalization of the agreement, noting that the settlement does not involve any monetary penalties. While the company maintains that it is committed to protecting customer privacy as vehicle connectivity becomes more common, the FTC order ensures that transparency and consumer control are no longer optional. These new requirements establish a precedent for the entire automotive industry regarding the handling of sensitive digital information generated by modern vehicles.
Source: FTC Bans GM From Selling Drivers Location Data For Five Years