General Motors and its subsidiary OnStar have been banned from selling customer geolocation and driving behavior data for five years, the Federal Trade Commission (FTC) announced on Thursday. The settlement comes after a New York Times investigation revealed that GM had been collecting and selling micro-details about its customers' driving habits to insurance companies and third-party data brokers without their consent.

The FTC accused GM of using a "misleading enrollment process" to get vehicle owners to sign up for its OnStar connected vehicle service and Smart Driver feature. The automaker failed to disclose to customers that it was collecting their data, nor did GM seek out their consent to sell it to third parties. As a result, customers were left unaware that their driving behavior was being monitored and sold, leading to increased insurance premiums in some cases.

One consumer, who spoke to a GM customer service representative, expressed frustration and concern about the unauthorized data collection and sales. "When I signed up for this, it was so OnStar could track me. They said nothing about reporting it to a third party. Nothing. […] You guys are affecting our bottom line. I pay you, now you’re making me pay more to my insurance company," the customer said.

According to the FTC, GM monitored and sold people's precise geolocation data and driver behavior information, sometimes as often as every three seconds. FTC Chair Lina Khan stated that the settlement "safeguards Americans' privacy and protects people from unchecked surveillance." The automaker has since discontinued its OnStar Smart Driver program, but the damage has already been done.

The settlement requires GM to obtain consent from customers before collecting their driving behavior data and allows them to request and delete their data if they choose. This move marks a significant step towards protecting consumer privacy in the era of connected vehicles. GM has committed to customer privacy, but the incident raises concerns about the lack of transparency and accountability in the industry.

The implications of this settlement extend beyond GM and OnStar, as it sets a precedent for the automotive industry as a whole. With the increasing adoption of connected vehicle technology, consumers must be aware of how their data is being collected and used. The FTC's action serves as a warning to companies that prioritize profits over privacy, and it is crucial that consumers remain vigilant in protecting their rights.

In conclusion, the GM settlement serves as a wake-up call for the automotive industry, highlighting the need for transparency, accountability, and consumer protection in the era of connected vehicles. As the industry continues to evolve, it is essential that companies prioritize customer privacy and adhere to ethical data collection practices.