FTC Warns Automakers About Personal Data Collected from Smart Cars

The FTC (Federal Trade Commission) has issued a stern warning to automakers, stating that it has begun to look much more closely at the data collected from intelligent systems embedded in automobiles.

Cars are becoming smarter with each new iteration, and are now hubs for multiple technologies with various purposes. The problem is that all of these systems, which can be easily assimilated as IoT devices, collect large volumes of data and personal information. What happens with that data is a growing cause for concern.

“While connectivity can let drivers do things like play their favorite internet radio stations or unlock their car with an app, connected cars can also collect a lot of data about people,” the FTC explained in its report. “This data could be sensitive—such as biometric information or location—and its collection, use, and disclosure can threaten consumers’ privacy and financial welfare.”

One FTC concern, for example, is that data collected from cars could be used by third parties, without the users’ knowledge, such as by insurance companies to keep tabs on drivers. Ultimately, the collected information could influence insurance rates.

“Car manufacturers—and all businesses—should take note that the FTC will take action to protect consumers against the illegal collection, use, and disclosure of their personal data,” the FTC warned.

There’s also the worry that the collected data from smart cars could be stolen in data breaches and fall into the hands of dangerous threat actors, generating national security issues.

The data FTC is trying to protect includes geolocation information, which can reveal essential information patterns regarding users, such as visits to sensitive locations like medical or reproductive health clinics, places of worship, or domestic abuse shelters.

Basically, the FTC is warning automakers and other third parties that collect data from cars that “firms do not have the free license to monetize people’s information beyond purposes needed to provide their requested product or service, and firms shouldn’t let business model incentives outweigh the need for meaningful privacy safeguards.”

The Federal Trade Commission did not say what specific law could be used to stop companies from forming their potentially unlawful practices but did offer several examples of trials against major firms that did just the opposite.