US authorities take action against Tesla’s confidentiality clauses

Tesla should no longer keep the security problems of its “autopilot” a secret. The US agency NHTSA has opened two new lawsuits against the electric car manufacturer. One of them is about the fact that Tesla did not report a fatal safety defect to the authorities as required. With the other procedure, the authority makes it clear that Tesla must not force customers and employees to keep security issues secret.

In essence, it is about so-called Non Disclosure Agreements (NDA), i.e. non-disclosure clauses in contracts. If you want to use Tesla’s driver assistance system, known as “Autopilot” or “FSD” (“Full Self Driving”) as a beta tester, you have to accept a far-reaching NDA – or do without the assistance system. The NDA is intended to prevent customers and employees who are allowed to use the “autopilot” from talking to third parties about their experiences and impressions.

Journalists are clearly mentioned: the beta testers should not speak to them at all, and should never take them with them for demonstration purposes. With regard to the publication of videos and photos, the NDA has not issued a ban, but urges restraint. It is precisely the media reports and messages from motorists that regularly bring the road safety authority NHTSA (National Highway Safety Administration) on the trail of safety problems.

“Given that consumer reports are an important source of information for the NHTSA to assess possible safety defects, any agreement that discourages or discourages beta testers from reporting safety concerns to the NHTSA would be unacceptable,” the agency wrote in a notice to Tesla . In a letter dated October 12, the NHTSA instructs the company to answer and disclose questions about the NDAs in the beta test. “In addition, restrictions on the publication of certain information already impair the NHTSA’s ability to obtain relevant safety information.”

Tesla CEO Elon Musk saw this problem coming. At the end of September, he already hinted that Tesla “may not need” the NDAs. With the rollout of the latest software update since Monday, Tesla is actually dropping the NDA – at least for consumers. It is not yet clear whether this also applies to employees. That should be evident from Tesla’s answers to the NHTSA questions the company has to provide by November 1st.

At least a dozen times, Tesla’s “Autopilot” rammed emergency vehicles at high speed that had stopped at the emergency lane with activated blue lights. There were numerous seriously injured people and at least one fatality. Five injured police officers have sued Tesla over this autopilot bug. At the end of September, Tesla gave some vehicles a software update to reduce the risk of such rear-end collisions.

However, Tesla is likely to have hidden the defect from the NHTSA, although it is obliged to report. “As Tesla knows, according to the Safety Act, motor vehicle manufacturers must trigger a recall via the NHTSA if they discover that their vehicles are defective or do not meet safety standards,” the NHTSA wrote to Tesla in a second notification.

This does not mean that Tesla necessarily has to physically call the defective vehicles back to the workshops. If a software update solves the problem and can be safely imported remotely, that’s enough. However, Tesla must report the problem to the authorities within five days, which expressly also applies to over-the-air software updates.

Now Tesla has to answer a number of questions about the devastating rear-end collisions on emergency vehicles by November 1st. The company must disclose all incidents that caused the software update and which of the accidents would not have happened if the software had already been improved. At the same time, Tesla is to reveal which owners of problematic Tesla cars it has compensated and in what way.

There are also questions about the “autopilot” beta test: What criteria are used to select the participating customers and when, how many customers have already paid for the “autopilot”, and in which vehicles was the assistance system activated and when?

It’s not the first time Tesla NDAs have caught the NHTSA’s attention. Forbes reported as early as 2016 that Tesla demanded the conclusion of so-called “goodwill agreements” for the repair of some production errors. Tesla only repaired an assembly error in the Model S vehicle suspension free of charge if the customers concerned committed themselves to confidentiality. At that time, too, Tesla refrained from recalling all potentially affected vehicles.

At the time, the buyer of a Model X even reported that Tesla had taken the car away from her after complaining about numerous defects. The refund of the purchase price of 150,000 US dollars made Tesla dependent on the conclusion of a confidentiality agreement. At the time, Tesla told the NHTSA that it did not want to prevent anyone from reporting to the authority. Tesla is generally not available for press inquiries.


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