On September 27, 2011, OnStar announced it was reversing proposed changes to its Terms and Conditions that would have allowed the company to continue to receive data from former subscribers’ vehicles unless they specifically opted out.  OnStar’s current Privacy Statement indicates that the GM subsidiary collects information regarding its customers’ vehicle operation, location, approximate speed, collision data and safety belt usage in connection with OnStar’s in-vehicle GPS navigation and emergency response services, and that the company “may share or sell” any of this data in anonymized form with third parties.  OnStar recently notified customers by email that it would continue to collect data from former subscribers, and that it reserved the right to distribute such data to third parties.  The announcement prompted a swift and strong reaction from members of Congress skeptical of the proposed policy changes.

In a letter dated September 21, 2011, Senator Al Franken (D-MN) and Senator Christopher Coons (D-DE) urged OnStar President Linda Marshall to reconsider the proposed changes, which they said appear to “violate basic principles of privacy and fairness.”  Responding to OnStar’s assurances that it would anonymize GPS records, the Senators wrote that “if a data set shows the exact location where a car starts every morning, the roads that car travels on its morning commute, the office where it is parked during business hours, and the schools where it stops on its way home, it is unnecessary for that data set to include a name or license plate for it to be connected to an individual and his or her family.”  As we reported in June, Senator Franken and Senator Richard Blumenthal (D-CT) introduced the Location Privacy Protection Act, which would require companies that get location information from mobile devices to obtain their customers’ express consent before collecting the data or sharing it with third parties. 

Earlier this week, Senator Charles Schumer (D-NY) sent a letter to the Federal Trade Commission calling for an investigation into whether OnStar’s policy changes would constitute an unfair or deceptive trade practice under Section 5 of the FTC Act.  Senator Schumer also wrote to Onstar, urging the company to “dial back the troubling changes [it] recently announced to its data collection and retention policies.” 

In the press release announcing OnStar’s decision to reverse the controversial policy, President Linda Marshall said, “We realize that our proposed amendments did not satisfy our subscribers.  This is why we are leaving the decision in our customers’ hands. We listened, we responded and we hope to maintain the trust of our more than 6 million customers.”