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General Motors GM+5.75% was sued late on Tuesday by Texas state officials over its alleged “false, deceptive, and misleading” practices that led to the sale of more than 1.8 million residents’ private driving data to insurance companies.
Technology installed in GM’s vehicles from the 2015 model year onward allowed the Detroit automaker to collect and transmit detailed driving data about each time a driver used their vehicle, according to the lawsuit, which was filed by the Texas Attorney General’s Office. The company collected data on when drivers got behind the wheel, how fast they were going, whether seatbelts were enabled, how far they drove, how long the engine was running — and more.
GM sold that data to car insurance firms, which were led to believe that consumers had given their consent. But the lawsuit claims that GM gained that consent through deceptive acts and never informed consumers it intended to sell “any” of their data.
“Companies are using invasive technology to violate the rights of our citizens in unthinkable ways,” Texas Attorney General Ken Paxton said in a statement. “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.”
The lawsuit accuses GM of violating the Texas Deceptive Trade Practices Act, a statute commonly employed by the attorney general to to protect consumers from misleading business practices. The lawsuit is seeking civil penalties, the destruction of all driving data obtained by GM or a third-party it sold data to, and full restitution to all impacted consumers.
“We’ve been in discussions with the Attorney General’s office and are reviewing the complaint,” GM said in a statement. “We share the desire to protect consumers’ privacy.”
The move by Paxton comes months after The New York Times reported that GM had been selling its data to global data brokers like LexisNexis RELX+2.68%. Much of that data was collected through GM’s OnStar Smart Driver, a feature that rates people’s driving.
Several other automakers have relationships with LexisNexis and data broker Verisk VRSK+0.32% that provide them with driving data they can share with insurance companies, The Times reported. That includes Kia America, Subaru of America, Mitsubishi Motors, Ford Motor F+2.31%, American Honda Motor HMC+1.63%, Nissan North America NSANY+1.14%, and Hyundai Motor America HYMTF0.00%.
According to Paxton’s lawsuit, GM has notched agreements with Verisk, LexisNexis, British connected car startup Wejo, and Jacobs Engineer Group J+1.21%. In 2019, GM took a 35% stake in Wejo as part of a deal that gave it access to drivers’ data, which Prolific North reported was routinely sold at a loss.
Democratic Sens. Ron Wyden of Oregon and Edward J. Markey of Massachusetts last month sent a letter asking Federal Trade Commission chair Lina Khan to investigate how the auto industry collects and sells customer data.
According to their letter, Verisk paid Honda $25,920 for data between 2020 and 2024; that comes out to 26 cents for each of the 97,000 cars data was collected from. Hyundai shared data from 1.7 million vehicles with Verisk over a six-year period for $1.04 million, or 61 cents per car. GM’s annual revenue from its Smart Driver program was in the “low millions of dollars” range, the Times reported.