The Federal Trade Commission said on Thursday that it had reached a settlement with General Motors that would ban the automaker from providing drivers’ behavior and geolocation data to consumer reporting agencies. The ban will last for five years.
The New York Times reported last year that G.M. was collecting data about people’s driving behavior, including how often they sped or drove at night, and selling it to data brokers that generated risk profiles for insurance companies. Some drivers reported that their auto insurance rates increased as a result.
“G.M. monitored and sold people’s precise geolocation data and driver behavior information, sometimes as often as every three seconds,” said Lina M. Khan, the chair of the F.T.C. “With this action, the F.T.C. is safeguarding Americans’ privacy and protecting people from unchecked surveillance.”
The F.T.C. opened an investigation and determined that G.M. had collected and sold data from millions of vehicles “without adequately notifying consumers and obtaining their affirmative consent.” Drivers who signed up for OnStar Connected Services and activated a feature called Smart Driver were subject to the data collection. But federal regulators said the enrollment process was so confusing, many consumers did not realize that they had signed up for it.
“G.M. failed to clearly disclose to consumers the types of information it collected through its Smart Driver feature, including that their geolocation and driving behavior data — such as every instance of hard braking, late-night driving and speeding — would be sold to consumer reporting agencies,” the F.T.C. said in a statement. “These consumer reporting agencies used the sensitive information G.M. provided to compile credit reports on consumers, which were used by insurance companies to deny insurance and set rates.”
In a statement, G.M. said it had already ended the data collection program “due to customer feedback.” The company said customers could see and delete their personal information through a form on its website.
In the weeks after The Times’s investigation, G.M. stopped sharing information about drivers with two data brokers, LexisNexis Risk Solutions and Verisk, that worked with the insurance industry. The five-year ban prohibits G.M. from sharing information about individual drivers, but it can still share anonymous data about people’s driving with third parties, such as road safety researchers.
Ms. Khan, who policed corporate data collection and the tech industry during her time leading the F.T.C., will be replaced as chair when the Trump administration takes over next week.
Under the settlement agreement, G.M. must make it easier for drivers to turn off tracking of their vehicle’s location, and make it possible for them to gain access to and delete the data the automaker has collected about their driving.