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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

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Most experts agree that the introduction of autonomous vehicles will be the biggest change to the auto industry since the invention of the car itself. Every industry associated with automobiles, directly or indirectly, will be impacted as autonomous vehicles become the norm. It’s not a matter of if this will happen, but when it will happen, with the final phases of autonomous technology implementation expected by approximately 2040.

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Every industry, from airlines to hotels and roadside restaurants, will feel the effect as people utilize their vehicles in completely new ways. Recent history teaches us that it doesn’t take long for business models to be completely disrupted by rapid advances in technology. For example, Blockbuster went bankrupt in 2010 after rejecting a partnership with Netflix just ten years earlier.

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With accidents expected to drop by up to 80% after autonomous vehicles make up a majority of the vehicles on the road, some insurance companies are already adapting their business models. Allstate Insurance Company (Allstate), for one, is positioning itself for the future as premiums are expected to substantially drop. Last year, Allstate obtained two patents entitled “Traffic Based Driving Systems.”<a href="https://www.wnj.com/Publications/Autonomous-Vehicles%E2%80%94Safety-vs-Privacy#Note">1</a> The patents cover driving analysis servers, systems and methods that use sensors, telematics devices and cameras to identify “potentially high-risk or unsafe driving behavior.” This information will be used to calculate or adjust a “driver score,” which will be used to determine coverage, premiums, deductibles and award safe driver discounts, etc.

Technology of this sort will be useful in conjunction with autonomous vehicles, as they utilize a number of different devices and data to navigate the roadways. Real-time and historical data will be especially useful for modeling driving profiles. One can imagine classifications of autonomous vehicles tied to their own inherent technological abilities, as well as the driving traits of their owners. For example, preferred routes may be dedicated to “safe” autonomous vehicles/drivers, while less preferred routes are given to other autonomous vehicles/drivers based, for example, on prior high-risk or unsafe driving behavior.

Devices associated with tracking driving behavior are not new. A number of plug-in devices exist already that award safe driving behavior, such as devices from Allstate, Progressive, Nationwide and State Farm. However, these devices are typically limited to just a handful of driving metrics, including miles driven, speed, hard braking, fast acceleration and nighttime driving. “Safe” drivers are offered a discount when utilizing such devices, which supposedly offset other less reliable information insurance companies often rely on, including the driver’s age, gender, geographic location and credit history.

As described in Allstate’s recent patents, a vehicle may include one or more cameras capable of recording what is occurring both inside and outside of the vehicle. Other devices may be used to monitor noise levels inside the vehicle, a driver’s heart rate and even the presence of alcohol. Understandably, Allstate’s endeavors have raised a number of privacy concerns, with a quick Internet search producing dozens of articles referring to Allstate’s “Spy Car,” “Big Brother” and George Orwell’s&nbsp;1984.

Just a few of the questions that have been raised in connection with Allstate’s patents include:

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Thankfully, merely obtaining a patent does not mean that a company will implement the associated technology. However, it is safe to assume that at least some form of this technology, claimed or otherwise, will make its way into autonomous vehicles of the future. Allstate and other businesses developing and implementing data collection systems of this sort should be mindful of privacy concerns, both from a consumer and a legal standpoint. By way of example, General Motors (GM) experienced a backlash with OnStar in 2011. Attempting to rely on updated terms and conditions for OnStar, GM planned on collecting information from non-customers unless they opted out. A public outcry including senator comments—alleging possible violation of federal law—quickly led to GM killing the plan. Various smart TV manufacturers have had similar public relations hiccups when attempting to track and collect information on their customers.

Based on the rapid pace of technology and importance of data security, we can expect data protection regulations to be tailored towards autonomous technology. Likewise, insurance companies can expect to see data protection standards being implemented. Before taking advantage of new technologies, companies should consult with legal counsel to ensure that they are complying with relevant data protection and privacy laws. In addition, companies should strive toward greater transparency with their customers with clear, informed consent being a primary goal. As for vehicles of the near future, even if a driver gives consent, it remains to be seen how consent will be obtained from passengers and others. &nbsp;

<a>1</a>&nbsp;U.S Patent Nos. 9,081, 650 and 9,104,535

Automotive

Autonomous, Connected and eMobility

Partner

Wyatt J. Istvan-Mitchell

Intellectual Property

Autonomous Vehicles—Safety vs. Privacy

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Autonomous Vehicles—Safety vs. Privacy

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