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U.S. Sens. Ron Wyden (D-Ore.) and Ed Markey (D-Mass.) wrote a letter to Federal Trade Commission (FTC) Chair Lina Khan on Friday, urging the commission to investigate the automotive industry‘s handling of driver data.
Letter Overview: The letter asks the FTC to investigate automakers’ disclosure of Americans’ driving data to data brokers. In March, the New York Times reported that automakers, including General Motors Co (NYSE:GM), Honda Motor Co Ltd (NYSE:HMC) and Hyundai Motor Company GDR (OTC:HYMTF), shared driver data with Verisk Analytics, Inc. (NASDAQ:VRSK) for resale to insurance companies. This data included acceleration, braking and location information.
Automakers allegedly advertised data-sharing programs as a way to lower insurance bills without revealing that some insurers may charge some drivers more based on their data.
Wyden's office spoke with a national expert who claimed that some insurance companies use driver data from data-sharing programs to raise premiums above the normal rate.
Wyden and Markey asked the FTC to hold the companies and their executives accountable if an investigation reveals law violations.
GM Allegations: The letter alleges GM combined the opt-in for its Smart Driver program with permission to receive safety reports and repair notifications. The disclosure did not disclose to customers that the Smart Driver program would share their data with data brokers to be sold to insurers; the senators called the practice “manipulative design techniques.”
GM did not confirm how many cars' data it shared with brokers or the price Verisk bought it.
In a statement to Benzinga, a GM spokesperson noted that the Smart Driver program ended in 2024 and denied the letter’s allegations.
“We vehemently deny the assertion that we used ‘manipulative design techniques’ to coerce consumers into enrolling in Smart Driver. Each consumer was given choice at the time of enrolling and throughout the life of the product,” the statement read.
“To be clear, we established the Smart Driver product to promote safer driving behavior for the benefit of customers who elected to participate. Data was only shared with an insurer if a customer initiated a quote directly with their chosen carrier and provided a separate consent to that carrier.”
According to the senators, GM officials revealed, during a May 2024 call, that the Detroit-based automaker is now sharing customer location data with a different unidentified company.
Honda Allegations: According to information Honda shared with Wyden, the Tokyo-based automaker shared data from 97,000 cars with Verisk without obtaining informed consent from customers. Verisk paid 26 cents per car. Consumers had to enroll in an optional program through Honda’s app, according to the company.
“However, Honda buried the disclosures about its business relationship with Verisk, which did not appear on the first
page, and were not likely to be seen by many consumers,” the letter alleges.
A statement emailed from Honda to Benzinga acknowledged its collection of data “to improve and advance our products and provide our customers with better user experiences,” but denied impropriety.
“With the subscription-based Driver Feedback Program, Honda contracted with Verisk to facilitate a service for Honda customers where, upon expressly opting in, their driving data was collected and given a driving score that the customer would receive along with a contextual overview of their driving behaviors,” the statement read.
“Some consumers with favorable driving scores were presented opportunities to opt-in to receive discount offers from specific participating insurance companies. Without that clear second opt-in by the customer, no identifiable consumer information was shared with any insurance company.”
Hyundai Allegations: The letter alleges Hyundai shared data from 1.7 million vehicles with Verisk. Verisik paid Hyundai $1,043,315 (about 61 cents per car).
Hyundai confirmed to Wyden’s office that the company shared data from consumers who enabled the internet by automatically enrolling drivers in its Driving Score program without telling them.
Hyundai required drivers to click through a consent form to enable the internet for a new car without disclosing that it would also share consumers' data with Verisk. Drivers could only cancel the program through the company's website or app.
Hyundai did not respond to Benzinga’s request for comment before publication.
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