OnStar Committing 'Brazen' Invasion Of Privacy, Says Senator

September 26, 2011

On Thursday, we told you about OnStar's new terms of service, which go live this December. Among the more controversial features in the company's new customer agreement, OnStar now reserves the right to share details about owners' location, speed, and other factors with third parties. Worse: OnStar says it will continue collecting that data even after folks cancel their subscriptions.

Now, Senator Charles Schumer (D-NY) is calling foul. He's calling on the Federal Trade Commission to investigate OnStar's new TOS to see if they violate federal consumer protection laws. Said the senator: "OnStar is attempting one of the most brazen invasions of privacy in recent memory."

Until now, OnStar's new TOS had received minimal attention, overshadowed by bigger public-relations disasters, like the trainwreck instigated by Netflix. To its credit, OnStar has tried to get ahead of the game, sending out letters to subscribers and owners well in advance of the launch date, and even going so far as to publish a video apologizing for the confusion those letters have caused. But with a well-known Senator of a populous state now calling attention to the TOS, OnStar might have to do some more serious backpedaling.

Our take

Like any corporate entity, OnStar is entitled to create products and terms of service to support its bottom line, so long as they don't break any laws. Conversely, the public is entitled to purchase those products (with their TOSes) or ignore them.

Frankly, we're not completely bothered by the possibility of OnStar selling data to third parties. After all, OnStar exists to capture data on customers -- without that, features like navigation and roadside assistance wouldn't be very useful. And though the practice of making customer data available to other companies for a fee might seem a little sketchy, it isn't too different from cable companies tracking subscribers' viewing habits so they'll know how to sell advertising. 

No the problems here are (a) OnStar's intention to track data on non-subscribers, (b) OnStar making data collection for non-subscribers opt-out instead of opt-in, and (c) OnStar's ineptitude in handling the whole TOS rollout.

Item C can't be helped (other than replacing the company's PR staff). Items A and B, however, could be addressed with a couple of quick changes to the TOS. The new rules don't become effective for over two months -- surely there's time for a re-write.

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