Ford CEO Says Privacy Laws Needed Amid Car-Gadget Growth – Bloomberg

Posted: Wednesday, January 15, 2014

Drivers’ privacy needs to be
protected by law, said Alan Mulally, chief executive officer of
Ford Motor Co. (F), as more vehicles add Internet connectivity and
location-based services.

The company is “supportive and participating” in talks
with regulators who are considering such legislation, Mulally
said yesterday at the Detroit auto show. He countered comments
made last week by his global marketing chief, who said Ford
knows when drivers of its vehicles violate traffic laws.

Documents released by former government contractor Edward Snowden last year have sparked a data-privacy firestorm
involving technology and telecommunications companies. The
comments by Jim Farley, Ford’s executive vice president of
global marketing, directed attention to the car industry as in-vehicle technology becomes more common.

“It’s just really important that we have boundaries and
guidelines to operate,” Mulally, 68, told reporters on the
sidelines of the show. “Our homes, the cars, everything is
going to be on the Internet. Everything’s going to be connected.
And so what are the guidelines? What do we want?”

Technology is the top-selling attribute for 39 percent of
vehicle buyers today, more than twice the 14 percent who say
their first consideration is traditional performance measures
such as power and speed, according to a study that consulting
firm Accenture released in December. A separate Government
Accountability Office report last month said that while
carmakers and navigation-device companies are taking steps to
protect privacy, some risks may not be clear to consumers.

Farley Comments

Farley said on a panel at the International Consumer
Electronics Show
in Las Vegas last week that Ford, the No. 2
automaker in the U.S., can use global-positioning system
technology to know when drivers breach laws.

“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,” he said, according to Business Insider. “By the way,
we don’t supply that data to anyone.”

Mulally said yesterday that Farley’s comments were
inaccurate.

“What he said was not right,” Mulally said. “We do not
track the vehicles. That’s absolutely wrong. We would never
track the vehicles. And we’d only send data to get map data if
they agree that that’s OK to do that, but we don’t do anything
with the data, we don’t track it and we would never do that.”

Franken Letter

The GAO published its report in response to a request by
Democratic Senator Al Franken of Minnesota, who in 2011 proposed
a law intended to protect the privacy of mobile-device users’
location data. Franken wrote a letter to Mulally yesterday to
point out a finding on the first page of the report that all
companies the GAO surveyed said they collect and share location
data.

“American drivers deserve better — and Mr. Farley’s
latest statements underscore this problem,” Franken wrote. He
asked that Mulally respond by Feb. 1 to additional questions
related to Ford’s data-collection and sharing policies.

Franken is chairman of the Senate Judiciary Committee’s
Subcommittee on Privacy, Technology and the Law, and has offered
separate proposals to require more disclosure by the National
Security Agency of its operations following Snowden’s release of
government documents that exposed the agency’s spying programs
and access to data.

Protecting Privacy

“Regardless of any action taken by policy makers, Ford is
committed to protecting the privacy of our customers,” the
company said in an e-mailed statement in response to Franken’s
letter.

Ford uses data for customer-relationship management
purposes, Chief Operating Officer Mark Fields said yesterday at
Automotive News World Congress in Detroit, without giving
specifics.

“We don’t track, nor do we continuously transmit data from
our customers, and any data we do transmit is based on expressed
consent by the customer,” Fields said. Ford doesn’t send that
data outside the company, he said.

Sergio Marchionne, the CEO of the third-largest U.S.
automaker Chrysler Group LLC and its owner Fiat SpA (F), said
yesterday his companies don’t collect data on its customers.

The companies have been “very, very wary” of having
direct access “in a personal way” to customers’ vehicles,
Marchionne told reporters at the auto show.

“We have left this information in such large data status
that it cannot, in any way, shape or form, allow us to formulate
a view of either a particular individual or a class of people,”
he said.

Connected Cars

The number of cars connected to the Internet worldwide will
increase more than sixfold to 152 million in 2020 from 23
million now, according to researcher IHS Automotive.

“We’re in a connected world,” Mulally said. “So this
whole thing about our data, privacy, whatever; there’s going to
be a lot of good work done to establish guidelines and
expectations. It’s great that is happening now.”

Ford, based in Dearborn, Michigan, rose 1.2 percent to
$16.59 at 11:58 a.m. in New York. The shares advanced 19 percent
last year as the Standard & Poor’s 500 Index gained 30 percent.

To contact the reporter on this story:
Craig Trudell in Detroit at
ctrudell1@bloomberg.net

To contact the editor responsible for this story:
Jamie Butters at
jbutters@bloomberg.net

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