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Vehicles equipped with Internet access, so-called connected cars, are becoming the norm, and their proliferation is alarming consumer data privacy advocates.
According to Counterpoint Technology Market Research, by 2030, more than 95% of passenger cars sold will have built-in connectivity. This will enable automakers to offer capabilities related to safety and security, predictive maintenance and prognosis. But it also paves the way for companies to collect, share and sell data related to driving habits and other personal information that people may not want to share.
Parv Sharma, senior analyst at Counterpoint, said that while most automakers offer the option to opt out of unnecessary data sharing, many other consumer technologies can make money by selling their data. As with , these settings are often embedded within menus. His 2021 report from McKinsey predicts that various use cases for automotive data monetization could generate between $250 billion and $400 billion in annual revenue for industry players by 2030. It has been.
Certainly, there may be legitimate reasons to collect driver and vehicle data for safety and functionality purposes, and some important services such as emergency or security-related data sharing may require opt-outs. It may be difficult or impossible to do so. James Hodgson, director of smart mobility and automotive research at global technology intelligence company ABI, said predictive maintenance is one of the reasons for increased data sharing, allowing manufacturers to ensure that parts used in their vehicles fail. He said he could make a decision and issue a recall sooner than expected. the study.
But privacy concerns are growing as car companies move into the insurance business themselves, with reports that they are sharing driver data with insurance companies. For one thing, details about your driving habits and car usage will be reported to data collectors and potentially shared with insurance companies for pricing purposes. This is not to be confused with newer models of usage-based insurance offered by companies from Progressive to Root. Under this model, drivers may receive lower rates if their insurance company specifically allows them to install a device in their car that tracks their behavior.
There are also concerns that sensitive personal information could be shared, sold to advertising companies, or accidentally leaked in a way that could be used by malicious parties.
“The amount of personal and vehicle information auto companies collect, share, and in some cases sell exceeds what is needed to safely get people from point A to point B. And the situation is only getting worse. They just do it,” said Jen Kaltrider, a privacy researcher at the Mozilla Foundation. . His September report for Mozilla gave 25 major car brands a failing grade on consumer privacy. The report’s headline read, “It’s official: Automobiles are the worst product category we’ve ever studied for privacy.”
Many consumers have no idea how their data is being used, or even that it is being used. A Salesforce survey of more than 2,000 U.S. car owners and renters found that few drivers understand the definition of a connected car and what data is collected. And while drivers may be willing to trade personal data in exchange for the benefits of connected cars, such as higher levels of personalization and cheaper insurance, not knowing how their data is being used leaves consumers vulnerable. industry experts said it could remain the same.
For customers looking to increase their data privacy, there are no easy answers. One option, which is becoming increasingly impractical, is to buy older cars that cannot collect data.
Another option is to research the car manufacturer’s privacy practices before making a purchase. This information can often be found on the car manufacturer’s website or by searching online using keywords such as company name, privacy, and connected cars. For example, some companies state in their privacy policies that they don’t sell customer data, but that doesn’t mean they don’t share it with third parties. Additionally, the definition of a sale can vary slightly depending on state privacy laws and other factors, Kaltrider said.
Opinions from Ford, Hyundai, Nissan, and BMW
Check your opt-out options before downloading an automaker’s app for your vehicle or signing up for a free trial of its connected service. Ford, for example, said it will offer customers options regarding sharing connected car data. Hyundai said owners and renters can choose whether to sign up for connected services by agreeing to the terms and conditions at any time while using their vehicle. Nissan also said consumers can opt out of data collection. Meanwhile, BMW said in a September release that it “empowers vehicle drivers to have granular choices regarding the collection and processing of their personal information. Additionally, our customers can delete their data whether in the app, in the vehicle, or online. I can do it.”
If you’ve already downloaded an app or signed up for a connected service, ask your car manufacturer what options you have to opt out. Additionally, in some states, such as California, Colorado, and Connecticut, consumers can submit requests to car companies about what personal information is collected and how it is shared, said Coven, D.C. managing director of the International Privacy Association. Zweifel-Keegan said. Expert. A small number of states allow consumers to opt out of the sale of their personal information, and more states are moving in this direction, he added.
Keep in mind what you are giving up in exchange for more privacy protection. Mo Al Bodour, consulting manager at SBD Automotive, said opting out of data sharing comes with a trade-off, as it often requires disabling useful or desirable features. These features include navigation, remote unlocking, the ability to receive service-related updates, and more.
Kaltrider said consumers should regularly check their privacy settings.
Government is considering car privacy regulations
Various regulatory efforts are underway to understand automakers’ data-sharing practices and curb potential privacy violations. Meanwhile, the Enforcement Division of the California Privacy Protection Agency announced a review of the connected vehicle industry at its July 2023 board meeting. A spokeswoman said the review was ongoing and declined further comment.
Automakers’ data-sharing practices could also be fodder for federal action. Basic disclosure of data practices alone is not necessarily enough to avoid enforcement by the Federal Trade Commission, Zweifel-Keegan said.
This issue has received widespread attention. In December, Sen. Edward J. Markey (D-Mass.), a member of the Senate Commerce, Science, and Transportation Committee, sent a letter to 14 automakers urging them to implement and enforce strong privacy protections in their vehicles. urged.
“Today’s cars are smartphones on wheels,” he wrote in an email. “We cannot allow automakers’ desire to make a profit to outweigh consumers’ need to protect their privacy. That’s why I asked 14 companies for answers about their data practices and privacy protections in cars. “Self-regulation is failing. The federal government must do so,” Markey said. “The federal government must be a leader in the fight to protect consumer privacy rights.”
“We desperately need a comprehensive federal consumer privacy bill that addresses this situation and pre-empts the hodgepodge of state laws,” Eric Goldman, associate dean for research and professor at Santa Clara University School of Law, said in an email. It is said that
Perhaps the best-case scenario for automakers and consumers is that, just as Apple is trying to differentiate itself from its competitors, the increased attention will see more car companies implement stricter data privacy practices as marketing tools. Hodgson said the company will be using the facility as a resource. At some point, manufacturers may compete with the idea that consumers can easily turn off certain data, although that’s not the case right now, he said.
