General Motors, OnStar at head of line in data trafficking suit
The petition alleges companies collected and sold the data of more than 1.5 million drivers to insurance companies without their consent.
General Motors LLC and OnStar LLC are up first in what is likely to become a series of lawsuits brought by the state of Texas against companies sharing data about consumers’ driving habits with insurers.
The Consumer Protection Division of the Office of Attorney General on Tuesday filed a deceptive trade practices original petition in Montgomery County against GM and OnStar. It alleges false, deceptive and misleading business practices related to the collection and sale of more than 1.5 million drivers’ data to insurance companies without the consumers’ knowledge or consent.
Causes of action under the Texas Deceptive Trade Practices Act include misrepresentations concerning the collection, use of and sale of OnStar Smart Driver driving data.
The state’s action follows a June 2024 announcement by Attorney General Ken Paxton of the opening of an investigation into several car manufacturers regarding allegations they improperly collected mass amounts of data about drivers directly from vehicles and sold the information to third parties.
While the named plaintiffs are limited to GM and OnStar, the complaint names many other companies involved in the alleged illegal practices.
It claims that as far back as 2015, GM contracted with Verisk Analytics Inc., and data analytics and risk assessment firm that provides insurance companies with “innovative solutions to meet customer needs.”
The complaint also alleges GM entered agreements to profit from the sale of highly detailed driving habits data in 2018 with British start-up Wejo Ltd.; and with LexisNexis Risk Solutions in 2019.
The LexisNexis agreement involved an initial multi-million-dollar lump sum payment and possible future revenue for GM using its ability to “potentially influence” other manufacturers to sell their data. The targeted companies included American Honda Motor Co. Inc,; Hyundai USA; Toyota Motor North Ammerica; and Volkswagen Group of America.
Ultimately, LexisNexis entered similar agreements with Mitsubishi Motors North American Inc. in 2018; Nissan North American Inc. in 2019; Ford Motor Co. in 2021; and Subaru of America Inc. and Kia America Inc. in 2023, the complaint alleges.
“Companies are using invasive technology to violate the rights of our citizens in unthinkable ways. 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,” Attorney General Paxton said in a prepared statement.
Most recently, GM sold driving data to Jacobs Engineering Group Inc. on Jan. 3, giving the company permission to use the information in its own products and to license the data to “other parties approved by GM.”
Assistant attorney general counselors on the case include Tyler Bridegan, Roberta H. Nordstrom and Summer R. Lee of the Consumer Protection Division.
The complaint against GM alleges the company deceived customers by compelling them to enroll it its products, including OnStar Smart Driver, as part of its vehicle “onboarding” process and told them failing to enroll would result in deactivation of the vehicle safety features.
Unbeknownst to customers, enrollment meant they were “agreeing” to GM’s collection and sale of their driving data, the complaint alleges, adding that despite lengthy and convoluted disclosures, GM never informed customers of its actual conduct.
GM’s corporate relations officer for legal issues did not respond to a request for information by deadline. A corporate spokesperson, however, informed CNN, “We’ve been in discussions with the attorney general’s office and are reviewing the complaint. We share the desire to protect consumers’ privacy.”