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Big data is a double-edged sword for big business

Car manufacturers in trouble for colluding with insurance companies

Big data has been big business for some time now. The more you know about your customer, the more you can personalize offers, and the easier it is to sell more people more things. Even better, you also get to on-sell all that data that your customers pay you to collect on them, to other third-party businesses to use in their own marketing and product development: win-win!

However, big car companies are starting to learn that the so called “surveillance capitalism” economy cuts both ways. Two large automotive manufacturers are facing class action law suits over their use of big data for business gains.

The first is being sued as an accomplice in a spate of highway robberies. The company makes cars that are programmed to pull over and shut the engine down whenever the car detects the driver is fatigued, inebriated or driving erratically. Unfortunately for the company and its customers, criminals are exploiting this ‘safety feature’ by scaring drivers into erratic evasive manoeuvres, which cause the car to grind to halt, leaving the occupants sitting ducks for their attackers. To add insult to injury, insurance companies are refusing to pay out on the claims resulting from the crime spree, stating that consumers should have read their Ts&Cs more closely.

The car manufacturer has no comment.

The other law suit is less deadly but just as expensive. The company is being sued for privacy violation, unfair discrimination, and emotional distress after it emerged that the firm was sharing drivers’ weights with insurance companies. The insurance companies used the personal data to penalize overweight customers with higher premiums.

Says one of the claimants, who prefers not to be named: “A lady’s weight is no-one’s business but her own!”

It seems as though the vehicle industry is learning what social networks did years ago: With great data comes great responsibility.

Warning: Hazardous thinking at work

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