Connected Cars And Privacy: ‘There’s No Easy Answer’ As V2V, Smart Road Technologies Are Inevitable

Jim Farley, a Ford Motor Co. (NYSE:F) vice president, raised eyebrows when he implied at the 2014 Consumer Electronics Show in Las Vegas earlier this year that the company could tell from its on-board Ford Sync navigation system when drivers broke the law. He quickly retracted the statement on CNBC and Ford issued a statement saying it doesn’t collect GPS tracking data from its customers.

But it could. And this was one of the main topics this week at the annual Intelligent Transport Systems World Congress in Detroit. Thousands of industry players gathered to discuss the future of driving in a world where connected cars wirelessly send safety messages to each other up to 10 times a second (pdf), speed limit signs change in response to traffic conditions (smart roads) and traffic agencies, governments, law enforcement and, yes, marketers could collect data on drivers’ routes and locations.

These technologies could greatly improve road safety, but they could also come at a price of giving up some personal data, auto tech experts said.

“There’s no easy answer to this,” Stefan Schumacher, a mobility services expert who works for IBM in Germany, told the Detroit News.

Indeed, U.S. government agencies are in the midst of grappling with the difficult question of what data automakers can and should collect and what they do with it.

“As in-car location-based services have become commonplace, privacy groups and policy makers have questioned whether location data collected by companies can be used for purposes beyond the provision of services, such as by data brokers who collect information to resell the information,” a U.S. General Accounting Office report from last December stated. But the GAO didn’t issue any recommendation for rules.

The U.S. National Traffic Safety Administration recently announced it was collecting comments from the industry and the public as it begins to formulate a new so-called Federal Motor Vehicle Safety Standard to promote industry-wide collaboration to make V2V, or vehicle-to-vehicle, communication widespread.

“NHTSA believes that no single manufacturer would have the incentive to build vehicles able to ‘talk’ to other vehicles, if there are no other vehicles to talk to — leading to likely market failure without the creation of a mandate to induce collective action,” the agency said in a recent Federal Register docket (pdf).

Meanwhile, facing federal spending cuts, the NHTSA is seeking a private company to administer the so-called “Internet of cars” that would cost an estimated $60 million a year to operate.

A company like Google Inc. (NASDAQ:GOOGL) has the ability to oversee such a project -- $60 million a year is couch change to a company of its size -- but handing over a infrastructure like that to the private sector still leaves significant questions about privacy and how much drivers would give up in order to increase road safety.