The recent lawsuit against General Motors for allegedly selling customer driving data has put the spotlight on the growing legal scrutiny surrounding data collection practices in the connected car industry. This case may just be the beginning as the Federal Trade Commission (FTC) and global regulators ramp up efforts to protect consumer privacy.

The Texas Attorney General's lawsuit claims GM unlawfully collected and sold private driving data of millions of customers to third parties, who then used it to manipulate insurance rates. GM denies these claims and asserts its commitment to consumer privacy.

FTC Steps Up Enforcement

The FTC has also announced that it will take action against companies that misuse connected car data. This follows a 2019 settlement with DealerBuilt for inadequate data security and recent amendments to the safeguards rule to enhance consumer protection. However, the FTC's power to regulate may be impacted by the Supreme Court's recent decision on "Chevron deference," creating uncertainty for automakers navigating evolving legal frameworks.

Global Data Privacy Landscape

Automakers also face the challenge of complying with diverse data privacy laws in different regions. The European Union, in particular, has stricter regulations than the U.S., and compliance can be a complex undertaking for companies operating in multiple markets.

Transparency is Key

Experts suggest that increased transparency in data collection practices is crucial for automakers to mitigate legal risks. Providing users with clear and easily understandable information about data usage, potential risks, and opt-out options can help them navigate this new era of connected vehicles.

Conclusion

As connected cars become increasingly common, the automotive industry must prioritize data privacy and transparency. The GM lawsuit and increasing regulatory scrutiny serve as a stark reminder that automakers must balance the benefits of data collection with the responsibility of protecting consumer privacy. Open communication with consumers about data practices is essential to build trust and avoid potential legal challenges.