Report from California Watchdog Group Calls for Privacy Protections from Connected Cars

A new report from a consumer group calls out what it says are privacy problems posed for consumers from connected cars and it points to new rules to be developed in California as a potential model across the country.

Secret recordings of industry meetings revealed in the report allegedly indicating that California Insurance Commissioner Ricardo Lara is working with the industry on a plan to allow data transmitted from cars to be used for pricing, despite the ban on the practice in California.

The California Department of Insurance has been reached out to for comment.

While location data can be turned off on your cellphone, there’s not yet an opt-out feature for your car, although California is poised to be the first in the nation with an “opt-out” for precise geo-location that is set to take effect in California by 2023.

New rules to be promulgated this year under Proposition 24—the California Privacy Rights Act—should preclude insurance companies and automakers from using precise geolocation without consumer permission, according to Consumer Watchdog. The rules would potentially prevent a host of privacy abuses identified by the report, which was presented to the California Privacy Protection Agency at public hearings held on Wednesday.

The American Property Casualty Insurers Association was reached out to for comment.

Among the issues identified in the report are:

  • 13 leading automakers reviewed by the United States General Accounting Office reported collecting, using and sharing data from connected vehicles’ location and operations.
  • Car companies, including General Motors, Toyota, Ford, reserve the right to collect, use and share data in order to track and market products.
  • Car manufacturers are working with software companies to bring advertising right into the dashboard. Information from Chevy’s OnStar Service is directly fed to apps for Dominos, IHOP, and Shell, among others.
  • Telenav, a software company developing in-car advertising software, touts its “freemium” model popularized by streaming services such as Hulu and Spotify, where in exchange for free services, consumers will be flashed with ads. Pop-up car ads could generate an average of $30 annually per car. Telenav said there is a large opportunity to capitalize on the $212 billion commuters spend while driving.
  • California’s insurance market is the epicenter of the latest fight over use the telematics, data transmitted from cars. Lara recently started a Twitter fight with Elon Musk over using telematics data collected by cars in insurance rate setting, vowing to protect, “consumer data, privacy and fair rates.” However, an investigation by Consumer Watchdog reportedly has found Lara is privately working with insurance companies on a proposal to allow electronic surveillance in California once he has the “political cover” to pull it off.

Currently, insurance reform Proposition103 bans the use of telematics to determine auto premiums.


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