The Federal Trade Commission's settlement with General Motors addresses allegations that the company collected and sold drivers' precise geolocation and behavior data without proper disclosure or consent12. Key points of the settlement include:

• A five-year ban on GM sharing sensitive driver data with consumer reporting agencies34

• Requirements for GM to obtain explicit consent before collecting connected vehicle data4

• Mandates for greater transparency in data collection practices2

• Establishment of a system allowing U.S. consumers to access and request deletion of their data4

• Instruction to delete previously collected data and notify third-party recipients to do the same5

GM has acknowledged the settlement, stating they discontinued the Smart Driver program in response to customer feedback and are committed to improving privacy policies and controls6. The FTC views this action as a step towards safeguarding Americans' privacy and protecting against unchecked surveillance2.

General Motors' OnStar Smart Driver program, initially marketed as a tool to improve vehicle performance and encourage safer driving, faced significant backlash in 2024 due to privacy concerns and unexpected insurance rate hikes12. The controversy erupted when it was revealed that GM had been sharing customers' driving data with insurance companies through data brokers LexisNexis and Verisk Analytics13. This practice led to:

• Increased insurance premiums or policy cancellations for some GM vehicle owners24

• Allegations of undisclosed or non-consensual enrollment in the program45

• A class-action lawsuit against GM and LexisNexis over the collection and sale of telematics data45

• Criticism of GM's data collection practices, which included monitoring acceleration, braking, and GPS data3

In response to mounting complaints and negative publicity, GM discontinued the OnStar Smart Driver program in April 2024, citing customer feedback as the primary reason for its termination12. The company also announced plans to enhance privacy controls and improve transparency in handling customer data1.

Telematics technology is reshaping the auto insurance industry by enabling more personalized and potentially fairer premium pricing. By analyzing real-time data on driving behavior, insurers can offer lower premiums to safer drivers while more accurately assessing risk12. The potential savings vary widely among insurers, with maximum discounts ranging from 15% to 40%, though actual average discounts are typically lower34. Some key benefits of telematics for lowering insurance premiums include:

• Improved driver behavior through targeted interventions

• More accurate usage-based insurance (UBI) pricing

• Enhanced fraud prevention and claim resolution

• Potential premium reductions of up to 25% for commercial fleets5

However, concerns remain about data privacy and the potential for premium increases for those deemed higher-risk based on telematics data14. As telematics technology becomes more affordable and widespread, it represents a significant shift towards data-driven insurance policies that more closely align premiums with actual driving habits6.