FTC Slams General Motors with a 5-Year Ban on Selling Drivers’ Data

The Federal Trade Commission (FTC) has slammed legacy automaker General Motors (GM) with a five-year ban on selling sensitive drivers’ data to third-party agencies. A probe by the FTC revealed that GM collected, used, and sold roughly 9 million American drivers’ geolocation and driving behavior data to insurance agencies and brokers. The FTC alleged that GM practiced all these data-sharing techniques without obtaining appropriate consent from the consumers or notifying them about it.

GM Collected and Sold Data without Consent

The ban applies to General Motors and its subsidiary OnStar in relation to its Smart Driver program. Driver behavior such as abrupt or hard braking, late-night driving, and speeding could be studied from such data and could be used to set insurance rates or even deny policies in some cases. In its defense, GM said that it had already stopped its Smart Driver program last year, which enabled the company to give feedback to drivers.

The settlement states that going forward, GM will have to take consumers’ consent before recording or collecting their data. Also, GM will have to give drivers the option to turn off tracking their vehicle location and allow them to delete or limit the data collection. The settlement comes just days before a Republican-led administration under President-elect Donald Trump comes into play. Democratic senators are happy that this settlement was reached during their tenure to protect American’s privacy.

Is GM Stock Worth Buying?

Analysts remain divided on General Motors stock owing to the diminishing market share of the automaker amid heated competition. On TipRanks, GM stock has a Moderate Buy consensus rating based on eight Buys, five Holds, and two Sell ratings. The average General Motors price target of $58.60 implies 13% upside potential from current levels. In the past year, GM shares have gained 49.6%.

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