The Federal Trade Commission (FTC) has accused General Motors (GM) and its subsidiary Onstar of collecting, using, and selling drivers' precise geolocation data and driving behavior information without adequately notifying consumers and obtaining their consent. The agency has proposed a five-year ban on the company selling such data to consumer reporting agencies.

The FTC's complaint alleges that GM used a "misleading enrollment process" to get consumers to sign up for Onstar's Smart Driver feature, which promised to use driving data to help drivers improve their vehicle's performance and encourage safer driving. However, some users reported being unaware that they had signed up for the feature, which collected and sold their data to insurance companies and third-party data brokers.

According to FTC Chair Lina M. Khan, "GM monitored and sold people's precise geolocation data and driver behavior information, sometimes as often as every three seconds." This data included details about drivers' habits, such as hard braking, late-night driving, and speeding, which could be used to increase insurance premiums.

The potential misuse of customers' data goes beyond increased insurance premiums. Geolocation data can reveal intimate details of a person's life, including their home and work addresses, and whether they visited a medical facility or place of worship. In the wrong hands, location data poses a serious danger to individuals, particularly those seeking sensitive services such as abortion.

The FTC's proposed order, if approved by a court, would ban GM and Onstar from disclosing data to consumer reporting agencies and require the companies to obtain affirmative express consent from consumers before collecting any vehicle data in the future. The automaker would also need to allow customers to obtain and delete their data, as well as limit the data collection from their vehicles.

The agreement is still subject to a 30-day public comment period before a final ruling goes into effect. TechCrunch has reached out to GM and the FTC for additional information and will update if we hear back.

This development is the latest issue to beset the carmaking giant in recent weeks. Last month, GM pulled the plug on funding its autonomous vehicle unit Cruise, a company into which GM has invested more than $10 billion.

The investigation by The New York Times' Kashmir Hill, which led to the FTC's complaint, highlights the need for greater transparency and accountability in the collection and use of consumer data. As the use of connected vehicles and IoT devices continues to grow, it is essential that companies prioritize consumer privacy and consent.

The implications of this case extend beyond the automotive industry, serving as a reminder to all companies that handle sensitive consumer data to prioritize transparency, consent, and accountability. As the FTC continues to crack down on companies that misuse consumer data, it is clear that the era of unchecked data collection is coming to an end.