General Motors (GM) has found itself in a significant controversy over its Smart Driver program, originally designed to assist parents in monitoring their teenage drivers and to aid adults in tracking their driving habits. However, revelations in 2024 disclosed that GM was sharing critical driving data with brokers. These brokers then resold the information to insurance companies, leading to increased insurance premiums for some drivers who were unaware their information was being used in this manner.
Last year, GM and its OnStar subsidiary reached a settlement with the Federal Trade Commission (FTC), which prohibits them from sharing certain types of driver data with third parties. This settlement, finalized in January 2025, specifically bars the companies from sharing geolocation and driver behavior data for a period of five years. In light of these issues, GM also chose to discontinue the Smart Driver service entirely.
In a further development, GM has now settled with the attorney general of the District of Columbia and 35 other states after they collectively sued the company as well.
In a statement to Reuters, GM asserted its commitment to providing safer and more personalized experiences through connected vehicle data, emphasizing its transparency regarding the information collected, how it is safeguarded, and customers’ options regarding data sharing.
According to TechCrunch, the latest settlement mandates that GM must adhere to compliance requirements assessed by an independent third party, rather than relying solely on the company’s assurances of adherence to privacy standards.
Editor’s Take
This development is crucial as it underscores the ongoing battle over data privacy in the automotive industry. For consumers, it highlights the importance of understanding how their data is utilized and the potential implications for their insurance rates. For businesses, particularly in the tech sector, compliance with privacy laws is becoming increasingly vital. Developers must also consider how these changes affect the design of future data-sharing technologies.
Source: arstechnica.com
