Senators Call on the FTC to Investigate Data-Hungry Car Companies

Senators Ron Wyden a Democrat from Oregon, and Edward Markey, a Democrat from Massachusetts, want the Federal Trade Commission (FTC) to investigate how car companies collect data and punish them if they’ve violated the law. The two senators called on the commission to look into auto manufacturers in a July 26 letter to FTC Chair Lina Khan.

New cars are a data privacy nightmare. Hyundai, GM, Honda, and other manufacturers outfit their vehicles with sensors that gather reams of telemetric data which is then sold on to third-party brokers. In April, a New York Times investigation into GM revealed how widespread the privacy violations are.

According to the letter, Wyden’s office contacted GM to figure out what the hell was going on.

“GM failed to obtain informed consent from consumers before sharing their data, and used manipulative design techniques, known as dark patterns, to coerce consumers into enrolling in its Smart Driver program, according to information the company provided Senator Wyden’s office,” the letter said.

If you’re alive and online then you’ve dealt with dark patterns before. It’s when a company uses deceptive practices to trick you into agreeing to something you normally wouldn’t. A GM car prompts new drivers to enroll in its Smart Driver program by telling them they’ll get emails about safety reports or their car alarm going off. When they agree, they’re also agreeing to let GM sell their data.

But not enrolling in GM’s Smart Driver program won’t save you.

“GM also confirmed to Senator Wyden’s staff that it shared location data on all drivers who activated the internet connection for their GM car, even if they did not enroll in Smart Driver,” the letter said. “These disclosures of location data—to other, unnamed third parties — have been going on for years.”

Two of the big companies buying customer data are LexisNexis Risk Solutions and Verisk, data brokers that work with insurance companies. The data is a valuable resource for insurance companies that provide information about a driver’s habits on the road to adjust their premiums. Often, this leads to people paying more for insurance than they would if their car weren’t spying on them.

GM said it would break off its relationship with LexisNexis following the New York Times story, but it still has a relationship with other data brokers. And the car manufacturers are cagey about who, exactly, they’re selling people’s data to. Using telematic data to raise insurance rates is illegal in Louisiana and Montana. In California, companies can only use it to verify mileage.

“Determining if insurance companies in fact used telematics data sold by Verisk to raise premiums, as opposed to using this data solely for discounts, would require a manual review of insurance industry filings to state insurance regulators, which are not easily searchable,” the letter said.

According to Wyden and Markey, this stuff is “likely just the tip of the iceberg.”

Wyden and Markey want the FTC to investigate Honda, Hyundai, and GM to get a grip on how bad this problem is.

“Given the high number of consumers impacted, and the outrageous manipulation of consumers using dark patterns, the FTC should also hold senior company officials responsible for their flagrant abuse of their customers’ privacy,” it said.

The FTC has been aggressive about consumer protection under Khan. It supported right-to-repair legislation and recently signaled it’s interested in taking on auto manufacturers over their data collection practices.

“The easiest way that companies can avoid harming consumers from the collection, use, and sharing of sensitive information is by simply not collecting it in the first place,” the FTC said in a May blog post.