General Motors and its subsidiary OnStar agreed to a settlement that prohibits them from sharing driver location and behavior data with third parties, the Federal Trade Commission announced yesterday.

The Federal Trade Commission says consumers didn’t know that General Motors was collecting data about their driving through its OnStar system, let alone that they were selling it. Now, an order from the federal government is forcing them to stop.

U.S. automaker General Motors and its subsidiary OnStar agreed not to disclose sensitive vehicle geolocation and driver behavior data to consumer reporting agencies for five years, the U.S. Federal Trade Commission said on Thursday.

The automaker was accused of collecting drivers' behavior data without their knowledge and providing it to third-party agencies that set insurance rates.

On Thursday, the agency issued a proposed order to ban the company from selling such data to consumer reporting agencies for five years. In its complaint, the FTC alleged that GM

This is the first action the federal agency has taken regarding connected vehicle data. “Respecting our customers’ privacy and earning their trust is deeply important to us. Although Smart Driver was created to promote safer driving behavior,

General Motors – once a trusted symbol of American innovation – was outed last year for secretly collecting and selling drivers' detailed driving information without their consent, with its OnStar Smart Driver technology.

General Motors failed to disclose to customers that it tracked their precise locations and driving behavior and sold the data to third parties, the Federal Trade Commission alleged in a proposed order.