The age of technology has brought numerous changes to everyday life, including the vehicles that transport us daily. A much overlooked aspect has emerged recently: the comprehensive data collection by our vehicles. According to a recent report, car manufacturers, such as General Motors, Honda, Kia, and Hyundai, are featuring web-connected technology that monitors, collects, and sells data about the car’s speed, sharp braking, and acceleration to data companies. Furthermore, these data companies then sell the collected information to car insurance companies to calculate the consequential rate increases.
While lawful, these practices create layers of implications that impact the relationship between consumers and corporations. Undoubtedly, consumers need to be more vigilant in this era of smart technology. What might seem to be a marvel of modern convenience could, indirectly, raise costs or compromise privacy. Yet, as consumers’ relationship with technology becomes more intricate, the ultimate responsibility lays in the hands of the companies that create and distribute this technology.
The temptation to sell user data for profit is potent, but the ultimate cost may not justify this short-term gain. Corporations must become increasingly aware that users will eventually discover these practices. This realization harbours potential for feelings of betrayal and resentment, significantly altering the trust relationship between customers and businesses. Additionally, this discovery will likely not sit well with industry regulators.
The question should not be whether companies can lawfully profit from selling users’ data, but whether they should engage in such practices at all. To address this, companies must ensure that customer data use is consistent with the best interests of its customers. If the data has the potential to inflict harm upon the customers, its use should be eliminated. Furthermore, corporations must ensure that customers are appropriately informed of these practices and given the opportunity to offer explicit consent. Failing to adhere to these considerations could even lead to users questioning their interconnected household devices and their data usage.
In light of these concerns, corporations and legal experts must strive for alignment on rules that protect customer interests, ensure that data use is carefully explained, and gain customer approval. Companies should not solely aim to protect themselves legally; rather, they should seek to preserve the trust built with their customers over time, a foundation that guarantees the longevity of their consumer relationships.
Rob Chesnut, who consults on legal and ethical issues, highlights the importance of these aspects in his column. The former general counsel and chief ethics officer at Airbnb, Chesnut is a veteran Justice Department prosecutor. His insights on these issues are worth a read for every legal professional.