Recent revelations have placed automakers under intense scrutiny regarding their data collection and sharing practices. U.S. Senators Ron Wyden and Edward Markey have called upon the Federal Trade Commission (FTC) to investigate how companies like Honda and Hyundai handle driver data, raising concerns over the sale of this sensitive information for minimal profit, according to Motor1.
In a letter to the FTC, Senators Wyden and Markey highlighted that Honda and Hyundai sold driver data to Verisk Analytics, a prominent data broker, at shockingly low rates.
The senators’ investigation discovered that automakers have been collecting driver data and selling it to data brokers, who then repackaged and sold it to insurance companies.
The letter revealed that Honda shared data from 97,000 vehicles with Verisk between 2020 and 2024. This data was sourced from owners who participated in Honda’s Driver Feedback program via the company’s mobile app. In return, Verisk compensated Honda a mere $25,920, translating to just 26 cents per car.
Hyundai, on the other hand, sold even more extensive data to Verisk from 2018 to 2024. This data came from users who activated their car’s internet connectivity, inadvertently enrolling in the Driving Score program.
According to the senators, Hyundai did not adequately inform users about this enrollment. The automaker sold data from 1.7 million vehicles for approximately $1 million, or about 61 cents per car.
In April, Verisk discontinued its product that analyzed driving habits using data from internet-connected vehicles. General Motors was also found to have sold consumer data from its Smart Driver program to Verisk, although the exact number of cars involved and the payment received remain undisclosed.
The senators’ letter further criticized the automakers for making misleading claims regarding the benefits of their data programs. They emphasized potential discounts while downplaying the likelihood of increased rates.
Senators Wyden and Markey have urged FTC Chair Lina Khan to launch an investigation into the methods automakers use to disclose and share consumer data. Motor1 has reached out to Hyundai to verify the figures mentioned in the letter.
The eagerness of automakers to collect and monetize driver data raises significant privacy and ethical concerns. As technology advances, vehicles equipped with computer chips, internet connectivity, and sensors can collect and transmit vast amounts of data.
This information, when shared with third parties such as insurance companies, can lead to financial implications for consumers, including potential rate hikes.
In an era where data privacy is increasingly paramount, the actions of automakers selling driver data for pennies prompt a crucial debate about consumer rights and transparency.
The outcome of the FTC investigation could have far-reaching implications for how automotive companies handle and protect consumer data moving forward.