Automakers feel the heat as US regulators tighten scrutiny on data privacy violations

While senators from Oregon and Massachusetts have accused GM, Honda and Hyundai of unfair, deceptive, and misleading data sharing practices, Texas has gone ahead and formally sued GM. The lawmakers claim these OEMs have obtained data on driving behavior without seeking “informed consent,” only to sell it to insurance companies which raised premiums accordingly.

Automotive had traditionally been a manufacturing-oriented industry until recently when software-defined connected vehicles burst onto the scene and terms like GenAI, ML and big data suddenly became relevant. As “traditional” vehicle manufacturers increasingly look out to transition from hardware to software-as-a-service (SaaS), mobility-as-a-service (MaaS) and vehicle subscription businesses, new revenue opportunities have arisen for original equipment manufacturers, parts suppliers, data aggregators, insurance companies, technology startups, cloud operators, aftermarket companies, infrastructure providers, and other stakeholders. However, as the mobility ecosystem scrambles to monetize the many data-driven opportunities, data privacy and protection norms are being advertently or inadvertently put on the line. Automakers are now being increasingly accused of resorting to deceptive or unethical workarounds to obtain vehicle data and conveniently ignoring the fact that consumers do not want their data to be sold.