United States: Connected Cars And Self-Driving Cars: Not On Auto Pilot In Terms Of Legal Risks

The next car you buy may not need you in the driver's seat. While the self-driving car may be rolling up to your driveway soon, there are still many issues related to legal risks that do not seem to be on auto pilot. Whether it is a question of liability or privacy and security, auto manufacturers and other original equipment manufacturers (OEMs) in the ecosystem are considering the impact of connectivity and automation in the automotive industry.

What Is a Connected Car and How Close Are We to Seeing Self-Driving Cars on the Road?

The highlights from the annual auto shows no longer seem to be limited to engine performance and horsepower. Often what steals the show and ultimately gets customers to open their wallets seems to be the software or artificial intelligence (AI) features between the "sheet metal."

Connected cars, loosely defined, mean cars where the onboard computer systems can interface with personal devices within the car or to networks or services outside the car, to exchange data with, for example, the manufacturer, your home or office, infotainment services, or your smartphone. This connectivity could provide features such as the streaming media from your mobile devices or the Internet, in-dash systems that provide GPS navigation with real-time traffic information, or status and safety information sent automatically to a manufacturer or insurer.

Vehicle-to-vehicle (V2V) and Vehicle-to-Infrastructure (V2I) communications may provide additional features, such as high-level traffic management and assistance in avoiding collisions.

Self-driving cars take it one step further and envision cars with sensors and AI that will allow cars to drive themselves. In the last two years, major automakers have announced acquisitions and investments with tech companies, and the traditional automotive industry seems to be giving way to new software and electronics models, and ultimately to new mobility models.

IT research firm Gartner predicts that a quarter billion connected vehicles will be on the road by 2020, and McKinsey & Company has reported that today's car has the computing power of 20 personal computers, features about 100 million lines of programming code, and processes up to 25 gigabytes of data an hour. The race is surely on.

Navigating Accountability and Liability Issues

Automotive regulators have been trying to catch up and apply existing laws and regulations to new technologies and driving concepts. In 2013, the US Department of Transportation's National Highway Traffic Safety Administration (NHTSA) announced a policy on vehicle automation, and in February this year, the automotive industry took notice when NHTSA, in a landmark ruling, concluded that the AI in Google's Self-Driving Car, the software behind its Self-Driving Systems (SDS), should be considered the legal "driver" under certain federal standards. A recent fatal crash involving a car with self-driving features, however, is undoubtedly raising more questions about the technology and how it will be rolled out. New understandings of liability may be necessary.

For example, if an autonomous vehicle is involved in an accident, who is at fault? Was it the human driver or the producer of the SDS, or what if it's a collision involving two autonomous vehicles? What if one vehicle has a semi- autonomous driving system, requiring some involvement of the human driver, and what if the human driver is distracted? Not all SDS will be created equal. There will be multiple providers, using different hardware and each making different decisions to shape the AI of autonomous driving features. For example, how "sensitive" or "aggressive" might the AI be, or what "ethical" choices might be programmed into it? The assignment of liability will involve many new questions such as these. Also, if every accident requires evaluation of any SDS involved, developers will need strategies to protect their intellectual property and trade secrets.

Key Takeaways:

  • The emerging technologies relating to connected cars and self-driving cars mean existing approaches to liability and supply chain management need to be reexamined.
  • Because of the number of manufacturers, software developers and tier 1 parts suppliers that have interdependencies, auto manufacturers as well as suppliers and other parties in the ecosystem will be better equipped to handle the next legal challenge if legal risks are calculated and contemplated up front.
  • Risk allocation decisions may require additional scrutiny in due diligence when assessing potential partnerships or acquisitions.

Clearing Privacy and Security Roadblocks

Increased connectivity and automation also mean new types of data collection, data traffic, and entry points for cybersecurity attacks. In order to meet customer expectations of personal data privacy and concerns about the reliability of cars with autonomous functions, OEMs are proactively building in privacy and data protection checkpoints to remove barriers to market adoption. Participating members in the Association of Global Automakers voluntarily adopted in 2014 the Consumer Privacy Protection Principles for Vehicle Technologies and Services and in 2015 automakers established an Automotive Information Sharing and Analysis Center (Auto-ISAC) to facilitate the exchange of cybersecurity threat information.

In the event of a data breach, auto manufacturers will likely face scrutiny from the patchwork of federal regulatory agencies and state attorneys general that enforce privacy and data protection laws, which auto manufacturers may not have previously encountered. One state legislature has already proposed new consumer protections that address data access. More familiar regulators will remain involved as well, such as NHTSA, which has published its Cybersecurity Best Practices for the industry. The volume and kinds of data generated by a car, including unique or sensitive personal information, such as a geolocation record revealing a person's (possibly a child's) daily movements and business, may mean that courts have to grapple with new forms of harm in lawsuits that typically follow a data breach.

Because the law is still developing, much of the work in identifying and managing risks will likely be performed through more detailed diligence efforts and better understanding of relevant facts. Instead of simply requesting a cybersecurity policy, for example, it may be useful to review how the policy has been implemented and then tested, or if there have been data breaches, to understand specifically how the security failed and has since been improved. Instead of only reviewing the retention policy of a navigation service, it may be worthwhile to learn precisely what data is collected and used, and how that data is stored afterwards. With the increased amount of data that is collected and processed cross-border, it is also important to review the data protection requirements and limitations on processing in relevant jurisdictions to identify potential compliance issues.

Key Takeaways:

  • Building upon industry-wide efforts, automakers and other third parties should review their data collection and processing activities and implement comprehensive data privacy and cybersecurity programs that take into consideration not only the liability issues outlined above but also the obligation to protect customer data and comply with relevant laws.
  • Engaging a cross-functional privacy and cybersecurity team as early as possible in the development or procurement phase will be helpful to have engineering and business development teams working side by side with lawyers to develop a comprehensive product strategy that not only meets market needs but also reduces legal and compliance risks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions