FYI: U.S. Senators Urge Action Against Car Data Collection Amid Privacy Concerns
They say the future of cars will be akin to "smartphones on wheels," and modern electric vehicles (EVs) are already paving the way. However, this technological advancement comes with its own challenges—particularly regarding data privacy. With cars collecting vast amounts of personal data, there’s growing concern over where this information goes and how it’s used. Recently, the New York Times unveiled troubling practices around car data collection, prompting two U.S. senators to call for government action to regulate this area.
Months ago, the NYT’s Kashmir Hill explored how EVs, including her own Chevrolet Bolt, were collecting data on driving patterns, braking, acceleration, and more. This data was then sold to brokers working with insurance companies, which tailored quotes to drivers’ personal habits—often without the drivers’ explicit knowledge or real consent, buried in pages of fine print.
Data Privacy and the Future of Connected Cars
Data privacy is becoming an increasingly complex issue in an age where we agree to numerous Terms of Service policies online. The impact of using driving data to potentially hike insurance premiums highlights that these concerns have tangible outcomes. Governments are now posed with the challenge of ensuring that the connected cars of the future do not infringe on drivers’ privacy.
Following Hill’s investigation, General Motors (GM) announced it would end its partnership with data broker LexisNexis and analytics firm Verisk. However, over the recent weekend, the NYT reported that Democratic Senators Ron Wyden of Oregon and Edward J. Markey of Massachusetts are urging the Federal Trade Commission (FTC) to take robust action against these practices.
"We write to urge the Federal Trade Commission (FTC) to investigate automakers’ disclosure of millions of Americans’ driving data to data brokers, and to share new details about the practice uncovered in a recent oversight investigation," stated the senators. They called on the FTC to hold the companies and their senior executives accountable if they violated any laws.
Implicated Automakers
The letter particularly points fingers at GM, Honda, and Hyundai for their data collection and sales practices. It accuses GM and Honda of employing manipulative tactics in a "voluntary" program aimed at lowering premiums.
The most concerning accusations were aimed at Hyundai. According to the senators, Hyundai enrolled all consumers who activated their new car’s internet connection into a driving score program, sharing this data with Verisk. Hyundai reportedly shared data from 1.7 million vehicles between 2018 and 2024, earning $1,043,315.69 in return, without seeking informed consent from consumers.
Eroding Trust
The senators emphasized that Hyundai never communicated to customers that their driving data would be for sale upon internet access activation. This lack of transparency is particularly alarming given Hyundai’s recent focus on high-tech offerings and premium EVs that depend on internet connectivity.
Both GM and Honda introduced "Safe Driver" programs promising lower premiums for better driving behavior. Yet, they couldn’t guarantee the data would solely be used for discounts. According to Verisk officials, contracts with automakers and insurers did not stipulate that driver telematics data be used exclusively to provide discounts.
Currently, automotive data collection practices are regulated by a patchwork of state laws. This inconsistency has led to calls for a unified, nationwide response. Wyden and Markey stressed that the problematic practices they discovered are likely just the beginning.
"Companies should not be selling Americans’ data without their consent, period. But it is particularly insulting for automakers selling cars for tens of thousands of dollars to then squeeze out a few additional pennies of profit with consumers’ private data," the senators asserted.
Future of Trust in Connected Vehicles
Spokespeople from the implicated automakers reiterated that these programs were opt-in, albeit without addressing that customers were not completely aware of what they were opting into. A GM spokesperson confirmed that they still share anonymized location data with an undisclosed company. Additionally, a data broker, in which GM had invested, has since ceased operations.
Automakers are evidently eyeing significant profits from driving data, all while asking customers to trust their capabilities in in-car software and pay for advanced features. As tech companies like Apple also face scrutiny over data privacy, it’s becoming clear that the automotive industry needs to build more trust if it wants to sell a high-tech, connected future without compromising user privacy.
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William Kouch, Editor of Automotive.fyi
