Data collected by cars and sold to third parties

The Federal Trade Commission recently imposed a significant penalty on General Motors, banning the company from selling customer data to consumer reporting agencies and third-party data brokers. GM had been collecting vast amounts of data on its customers, including driving habits and nighttime driving patterns, and selling this information to generate risk profiles for insurance companies. Many drivers were oblivious to the extent of data collection, often accidentally consenting to it by signing up for OnStar services.

The New York Times reported that some drivers saw their insurance rates increase due to this data sharing. The enrollment process was so convoluted that many vehicle owners were unaware they were sharing their data. A report by the Mozilla Foundation's researchers found that every major automaker had "horrible privacy and security" practices, despite customers facing multiple privacy policies for various aspects of their vehicle, including the car itself, connected services, smartphone app, and financial services for loans.

Consumer Reports also investigated and found that nearly every U.S. automaker was collecting and sharing "driver behavior data" with other companies.

Cars present unique challenges compared to smartphones due to the complexity of privacy controls spread across multiple systems and policies. Automakers collect significant amounts of data without much public scrutiny, making cars particularly problematic in terms of privacy. While a bill called the DRIVER Act has been introduced to give vehicle owners more control over their data, it still allows for data sharing with third-party brokers, which privacy advocates consider insufficient.

Some even propose the "Freedom Car," which would ban the government from requiring automated driving systems or wireless data transmission, but this idea has not gained traction yet.

The demand for simpler vehicles without excessive data collection is evident among consumers. Many are wary of vehicles tracking their every move and displaying advertisements. Automakers, however, have a strong incentive to continue collecting data due to the lucrative data economy. As long as there are financial rewards for gathering and monetizing information, there's little motivation for automakers to stop the practice.