Bloomberg News

Mulally Says Industry Needs Privacy Laws Amid Car-Tech Boom (3)

January 15, 2014

Drivers’ privacy needs to be protected by law, said Alan Mulally, chief executive officer of Ford Motor Co. (F:US), 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 1.8 percent to $16.70 at the close 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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