GM’s OnStar Reverses Privacy Shift

General Motors Co. (GM)’s OnStar vehicle navigation service said it won’t collect data on the driving habits of customers who cancel their subscriptions, reversing a policy shift that drew protests from three U.S. senators.

OnStar told customers in an e-mail last week that it would continue collecting information from vehicles of subscribers who drop the service. Customers would have been required to contact OnStar to halt data collection under the policy change, which had been due to go into effect Dec. 1.

“We realize that our proposed amendments did not satisfy our subscribers,” OnStar President Linda Marshall said in a news release. “We listened, we responded and we hope to maintain the trust of our more than 6 million customers.”

Senator Charles Schumer, a New York Democrat, yesterday called on the Federal Trade Commission to investigate OnStar over its data-collection policy, calling it “one of the most brazen invasions of privacy in recent memory.” Senators Al Franken of Minnesota and Christopher Coons of Delaware also objected to OnStar’s revised privacy policy in a letter to the company last week.

“OnStar’s decision is the right one and sets a good precedent for the future,” Schumer said in an e-mail today. “This announcement puts decisions about personal privacy back where they belong, in the hands of individuals.”

6 Million Subscribers

“I’m glad that OnStar heard our concerns and has decided to reverse course,” Coons said in a news release. “OnStar’s announcement today is an important step toward restoring the trust consumers had placed in it, and I hope that other companies learn from this experience.”

OnStar delivers navigation and security features such as emergency assistance to GM cars and other vehicles using the global-positioning system. The service has more than 6 million subscribers in the U.S., Canada and China, according to the company’s website.

The company, under its existing privacy policy, may still sell or share “anonymized” data on current customers’ vehicle location, speed and seat-belt use with third parties.

Claudia Bourne Farrell, an FTC spokeswoman, declined to comment. Marshall said OnStar had not been contacted by the agency over its privacy policy.

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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