Consumers can expect many benefits from their cars’ increased data collection programs, running the gamut from simple location services like GPS and OnStar to “networked” cars that can communicate their location with other cars on the road to prevent accidents. In the near-future, data collection will even allow cars to care for themselves: technologies currently exist that can spot and diagnose internal mechanical problems long before such problems would have become apparent to a cars’ owner, and cars are increasingly able to download patches directly from their automaker without ever needing to be taken to a mechanic.

As is usually the case when it comes to big data however, the benefits that come from increased collection also bring dangers. Speaking on a panel at the Washington Auto Show last Wednesday, Federal Trade Commissioner Maureen K. Olhausen advised the crowd that as the collection and disseminated of data by cars continues to increase, the automotive industry will need take reasonable steps to secure car owner and driver information or face the possibility of federal enforcement actions.

Here are a couple of recent legal developments concerning the privacy implications of global positioning system (GPS) technology.

1) Not-So-Sly Fox

On November 9, Fox Rent A Car, a Phoenix-based company with locations throughout California, settled a complaint filed against it by Attorney General Bill Lockyer and the San Mateo District Attorney concerning Fox’s use of GPS to track renters’ mileage and destinations. The complaint alleged that Fox had used GPS technology (1) to track mileage in order to impose mileage fees, which directly contradicted Fox’s advertised policy of unlimited mileage; and (2) to charge customers fees for leaving the state.

Though the GPS tracking section of the complaint was based on , which forbids liquidated damage penalties of the kind Fox imposed for mileage, Fox’s actions likely also violate Civil Code § 1936(p), which prohibits rental car companies from employing “electronic surveillance devices” for the purposes of assessing fines or surcharges. That provision became effective January 1, 2005.

Under the terms of the settlement, Fox is enjoined from using GPS technology for any purpose other than tracking vehicles suspected of being lost or stolen, Fox must keep a record of each time it uses GPS telemetry and must inform renters if they use other surveillance technology. Fox will pay a total of approximately $700,000, including $200,000 in civil penalties and $89,000 in restitution to customers who incurred mileage and travel surcharges.