Texas Sues General Motors Over Allegations of Unauthorized Data Collection
The state of Texas has initiated legal action against General Motors (G.M.) on Tuesday, accusing the automaker of unlawfully gathering extensive driving data from approximately 16 million drivers and subsequently selling this information to insurance companies without obtaining proper consent.
Texas Attorney General Ken Paxton expressed strong disapproval, stating, “Millions of American drivers wanted to buy a car, not a comprehensive surveillance system that unlawfully records information about every drive they take and sells their data to any company willing to pay for it.”
A spokesperson for G.M. responded by noting that the company has been engaged in discussions with the attorney general’s office and is currently reviewing the complaint. The spokesperson added, “We share the desire to protect consumers’ privacy.”
This lawsuit comes on the heels of an investigation that Paxton launched after a report by The New York Times highlighted that General Motors, along with other automotive companies, had been collecting and selling detailed records of customer driving behaviors to insurance companies. This data includes critical information such as the start and end times of trips, instances of hard braking, and speeding violations. Consequently, many customers experienced significant hikes in their insurance premiums due to this data.
In March, shortly after the initial report by The Times, General Motors announced its decision to cease sharing such information with data brokers.
Details of the Allegations Against G.M.
The complaint lodged by Texas against General Motors and its subsidiary, OnStar, claims that the automaker began selling its customers’ driving data to external vendors as early as 2015. Among these vendors were notable companies such as LexisNexis Risk Solutions, Verisk Analytics, and Wejo. These companies then used the data to generate a “driving score” for each customer, which was sold to insurance providers. According to the legal filing, G.M. profited significantly from these transactions, amassing millions of dollars through both initial payments and ongoing royalties.
As a side note, LexisNexis and Verisk have not yet responded to requests for comments on this matter, while Wejo filed for bankruptcy in 2023.
Customer Enrollment and Data Collection Practices
The lawsuit further alleges that customers were often unwittingly enrolled in the data collection program at G.M. dealerships. This process was described as a “deceptively designed sales flow”, ensuring that customers would inadvertently sign up for G.M.’s products and, consequently, be included in G.M.’s Driving Data collection initiative. The disclosures regarding data collection were reportedly hidden within a lengthy 50-page document, which stated that the information gathered would primarily be used to enhance the safety and maintenance of G.M. vehicles. Customers who opted out of enrollment were met with warnings indicating that certain safety features of their vehicles would be disabled.
Legal Action and Future Implications
The lawsuit, which has been filed in a state district court located in Montgomery County, accuses General Motors of violating the Texas Deceptive Trade Practices Act. The state is seeking a court order that would require the automaker to destroy all driving data it has collected. Additionally, they are pursuing restitution for the affected customers, which includes approximately 1.8 million Texans.
In a related development, two Democratic senators, Ron Wyden of Oregon and Edward J. Markey of Massachusetts, sent a letter last month to Lina Khan, the chairwoman of the Federal Trade Commission (FTC), urging her agency to investigate the practices employed by the auto industry concerning the collection and sharing of customer data.
