Modern gadgets have been collecting every bit of user data they can gather, just to sell it off to the highest bidder, ever since tech companies realized that data could be sold for dollars. While the user's car has long been a part of the data-sharing network, it seems that its contribution might be significantly greater than most of us would have expected.
It may even be the biggest seller of users' personal information.
There are so many so-called connected cars out there, cars that have internet access, that are becoming a regular part of the car driving experience, and the proliferation is raising concerns among consumers regarding their data privacy rights.
As reported by Counterpoint Technology Market Research, more than 95% of the passenger cars sold by 2030 will be equipped with embedded connectivity, according to the company. Consequently, car manufacturers are now able to offer functions related to safety and security, predictive maintenance, and prognostics to their customers.
Additionally, this opens the door for companies to collect, share, or sell personal information about individuals, including driving habits, and other information that people may not wish to share with others. Despite many car manufacturers' efforts to give consumers the option to opt out of excessive data sharing, Counterpoint senior analyst Parv Sharma explains that these options are often hidden within menus, which is also the case for many other consumer technologies where the sale of data has the potential to generate income.
As a result of a McKinsey report published in 2021, various use cases of monetizing car data could result in an annual revenue stream of $250 billion to $400 billion for industry players by 2030 from multiple use cases for monetizing car data. It is true that there are valid reasons for collecting data from drivers and vehicles, such as those for emergency and security-related purposes, and that there may not always be a way for individuals to opt out of some essential services like that.
It is important to share more data with other companies as a result of the fact that predictive maintenance enables manufacturers to detect when a part of their fleet is failing earlier than expected and to issue a recall on it, according to James Hodgson, ABI Research's director of smart mobility and automotive research.
It is becoming increasingly apparent that there are privacy concerns surrounding the use of car companies to share driver information with insurers, and as car companies become involved in the insurance business, there is growing concern about privacy.
For instance, driving habits and details regarding car usage might be reported to data collectors and passed along to insurance companies to make rate decisions based on those details.
It's also important to understand that this is not the same as the new model of usage-based insurance that would allow drivers to earn lower rates if they allow insurers to embed devices into their cars that track their behaviour, which could be offered by companies such as Progressive and Root. There are widespread efforts underway by regulatory authorities to understand car manufacturers' data-sharing practices and to ensure that potential privacy violations are not committed.
On the other hand, in response to the announcement made at its board meeting in July 2023 by the enforcement division of the California Privacy Protection Agency, there will be a review of the connected vehicle industry conducted under its purview. An official spokeswoman declined to comment further on that review, saying that it is underway.
A federal investigation of the data-sharing practices of carmakers might also be a basis for federal action in the future.
In Doubt-Keegan's view, publishing basic information about data practices can be insufficient to avoid the FTC's enforcement of those practices.
There has been an increase in public awareness about this issue. There has been a letter sent (December) by Senator Edward J. Markey (D-Mass.) to 14 car manufacturers urging them to implement and enforce stronger privacy protections in their automobiles, as the senator is a member of the Senate Commerce, Science, and Transportation Committee.
