The state of Texas has taken legal action against General Motors (GM), accusing the automaker of collecting and selling drivers’ personal data without their knowledge or consent. The lawsuit, filed by Texas Attorney General Ken Paxton, stems from an investigation launched in June into several car manufacturers for similar allegations.
Paxton’s investigation uncovered what he deemed “egregious business practices” by General Motors, claiming the company violated the privacy of Texan residents and broke the law. According to the lawsuit, General Motors utilized technology embedded in most of its vehicles manufactured from 2015 onward to collect, record, analyze, and transmit detailed driving data. This data was then allegedly sold to third-party companies.
The complaint further alleges that General Motors misled customers when promoting its products, including the OnStar Smart Driver service. Customers were allegedly not informed about the company’s actual practices, which involved the systematic collection and sale of their highly detailed driving data.
In response to the lawsuit, a General Motors spokesperson stated that they are reviewing the complaint and “share the desire to protect consumers’ privacy.”
This lawsuit against General Motors comes amidst growing scrutiny surrounding how automakers handle driver data. In July, U.S. Senators Ron Wyden (D-Ore.) and Ed Markey (D-Mass.) urged the Federal Trade Commission to investigate the automotive industry’s data-sharing practices. They expressed concerns that companies like General Motors, Honda Motor Co, and Hyundai Motor were sharing driver data with data brokers, potentially leading to higher insurance premiums for some drivers.
Earlier this year, reports emerged that internet-connected vehicles, including the Chevrolet Bolt, were tracking driving patterns and transmitting this data to insurance companies. This practice contributed to increased insurance costs for some drivers, intensifying the debate about privacy concerns in the automotive industry.
Despite facing these legal challenges and global operational difficulties, including declining sales in China, General Motors remains committed to maintaining financial stability in its Chinese operations.
General Motors’ stock closed at $43.32 on Tuesday, up 0.77% for the day. However, the stock dipped 0.44% in after-hours trading. Year to date, GM shares have surged by 20.17%.
