Introduction
In a surprising revelation, a report by The New York Times has brought to light the practice of automakers selling drivers’ data for exceptionally low amounts of money. If you drive a car capable of connecting to the internet, chances are your driving habits have been collected and sold to third-party data brokers. This blog post delves into the details of this practice, focusing on a recent letter by U.S. Senators Ron Wyden and Edward J. Markey to the Federal Trade Commission (FTC).
Details of the Practice
The letter by Senators Wyden and Markey highlights three automakers—GM, Honda, and Hyundai—that sold data to the data broker Verisk. Verisk used this data to help auto insurers assign risk scores to drivers. One of Verisk’s products, which has since been shut down, rated drivers’ habits using data collected from internet-connected cars. Shockingly, the investigation revealed how little these manufacturers profited from selling the data. For instance, Honda was paid just $25,920 over four years for information about 97,000 cars, equating to merely 26 cents per car. Hyundai received just over $1 million for data on roughly 1.7 million cars over six years, amounting to 61 cents per car. GM did not disclose its earnings, though a report suggests it sold data for over 8 million cars.
Consumer Consent and Deceptive Practices
According to the letter, the process by which consumers’ data was shared varied among the automakers. GM and Honda customers had to opt-in for their data to be shared, but Senator Wyden referred to this process as “deceptive.” Hyundai, however, automatically enrolled customers who enabled internet access in their vehicles for data sharing with Verisk.
Conclusion
The good news for concerned drivers is that Verisk shut down the controversial program in April following the report in March. The letter from Senators Wyden and Markey concludes by urging the FTC to investigate the practice within the industry and to hold senior executives accountable. “Companies should not be selling Americans’ data without their consent, period,” the senators stated, emphasizing the need for stricter regulations and greater transparency.
