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On March 9, the popular television show “60 Minutes” aired a segment titled “The Data Brokers: Selling Your Personal Information”. In the segment, Steve Kroft interviewed various privacy experts who explained how companies are collecting and selling very personal information in ways that consumers would never expect. While the focus of the segment was firmly on data brokers, the segment did include details of the types of data that is being shared through activities such as web browsing, transactions, mobile phones and Internet activities. There’s nothing new about companies leaving cookie in browsers. What is increasingly coming to the forefront is consumer awareness of what is being collected, how it is then being assembled into individual profiles by combining data from many sources, then sold to companies to better assist them with their marketing.
Auto dealers and vendors certainly contribute to these consumer profiles and with privacy concerns receiving high visibility, the government will inevitably be forced to step in and reassure consumers. At the recent, CeBIT IT fair, Volkswagen chief executive Martin Winterkorn warned the audience that it would be very easy for consumer’s own vehicles to turn into Big Brother. According to a recent article, insurance companies are aggressively trying to get consumers to install systems that would allow them to monitor driving behavior. The European Union is calling for mandatory GPS and 2-way data communications (similar to OnStar) to be installed in all vehicles. This past January, Ford’s Global VP/Marketing told an audience at CES “We know everyone who breaks the law, we know when you’re doing it. We have GPS in your car, so we know what you’re doing.” Obviously this alarmed many attendees and Farley has since retracted his statement.
Consumers are slowly realizing the depth of information being collected on them and then sold. I fully expect this trend to continue. A definite pushback will occur as consumers tighten up on the personal information they share combined with new regulations being enacted to limit or prevent companies from sharing personal data without direct individual consumer permission.
What does that mean for car dealers? It poses all sorts of challenges beginning with things as small as RDR’ing vehicles to the manufacturer to simple targeted marketing by dealers to their consumers. Vendors to auto dealers who rely on big data to provide dealers with improved marketing results may find it more challenging to do so. Imagine having to ask every one of your customers whether you can share their information. On the opposite end of the repercussion scale, dealers will find that they may face liability issues stemming from actions taken by their vendors.
Big data is an essential component of our society. It’s not going away. What businesses will find, however, is that who they are able to share it with and the reasons in which they will be able to will increasingly decrease. Dealers need to ensure that they have vendor partners who place a high priority on data security in action, not just through lip service. Dealers have been dealing with increasingly stricter compliance issues for years now. Consumer privacy concerns will only cause more compliance issues for dealers to monitor. All businesses should take proactive steps with this in mind by reviewing their agreements with any entities that they share information with and taking action now to correct any security deficient agreements they currently have.