California regulators are investigating data collection practices used by car manufacturers over privacy concerns.
The California Privacy Protection Agency (CPPA) on Monday announced it would review data-sharing methods and regulatory compliance through conversations with car manufacturers. Executive director Ashkan Soltani noted that modern vehicles can “collect a wealth of information via built-in apps, sensors, and cameras, which can monitor people both inside and near the vehicle.” Consumer Watchdog, a buyer advocacy nonprofit operating in California, called data collection “the new gold rush of the auto industry,” adding, “Automakers and third-party companies know where we drive, what we buy, eat, our texts. A whole consumer profile is created with this information to essentially tell you things.” The organization applauded the CPPA probe in a press release published the same day as the agency’s announcement.
Although the National Highway Traffic Safety Administration and the Federal Trade Commission enforce privacy regulations, automakers still profit by selling customer data. Car manufacturers are projected to earn $2 trillion in new revenue from data collection, according to WardsAuto. Nick Jordan, CEO of data commerce platform Narrative, explained the practice during an interview with Yahoo Finance: “[The automakers are] evolving their business to think of it as a data collection mechanism and then figuring out ways to use that data…As they get better, estimates go up to about $700 over the lifetime of a car, and so if you’re selling tens of millions of cars, you know, it’s a multi-billion opportunity and industry for them.”
The CPPA’s investigation comes amidst a rush of innovation in the automotive industry. In addition to privacy concerns, the influx of new technologies has come with other costs as well, such as declining vehicle satisfaction scores. But whether the agency’s review will shed light on illegal data collection practices, or result in meaningful change, remains to be seen. Regulators have so far declined to say which brands are included in the probe.
