General Motors To Pay $220 Million To Settle Multi-State Data Privacy Lawsuit

General Motors has agreed to pay $220 million to settle a lawsuit brought by the attorneys general of 35 U.S. states and the District of Columbia over its OnStar Smart Driver program. The states accused the automaker of enrolling millions of customers from 2016 through 2024 and selling driver data to data brokers for insurance purposes without telling customers.

What the states alleged

The New York Times reported in 2024 that GM had enrolled millions of customers in Smart Driver from 2016 through 2024 and then tracked their driving habits. According to the allegations, the program logged data on hard braking, late night driving and speeding, then sold the information to data brokers for insurance. Insurance companies raised premiums for people based on information from the program, the attorneys general said.

The attorneys general said GM did not tell customers that their data would be sold for that purpose. Many drivers were not told they were part of the program, and the automaker incentivized dealerships with bonuses to sign up as many customers as possible. Sometimes dealership employees allegedly accepted the program's terms and conditions for customers without their express permission.

The states also said GM did not always notify customers about their enrollment. More than 370,000 drivers were told they were not enrolled even though they actually were. GM eventually unenrolled them, but it did not notify them about the mistake and still sold their data. The attorneys general described the data as "personal, identifiable and specific."

Settlement terms

As part of the settlement, GM is required to limit the driving data it collects from customers and protect their personal information going forward. The company will also be subjected to mandated internal and external data protection and privacy program assessments, as well as oversight and additional training at its dealerships.

Other actions

Earlier this year, the Federal Trade Commission banned GM from sharing specific consumer data with third parties for five years due to the issue. In May, the automaker reached a separate settlement with California for $12.75 million.

Sources: Engadget