General Motors has agreed to pay $12.75 million to settle a lawsuit in California over how it handled customers’ driving data. The company faced allegations of selling personal driving information without proper consent. This move follows earlier legal trouble related to data privacy and sales practices.

Details of the Settlement

The settlement requires GM to pay civil penalties and stop selling driving data to third parties for five years. Specifically, GM must delete any stored driving data within 180 days, unless it has customer approval for specific uses. The company also has to create a privacy program to evaluate how it collects and manages data from its OnStar service.

Under the agreement, GM is prohibited from selling certain driving data, including names, contact details, location information, and driving habits, without explicit customer permission. The company must also report its data collection and privacy practices to authorities, ensuring greater oversight moving forward.

Background and Privacy Concerns

The legal issues stem from a 2024 report by the New York Times, which revealed that GM collected and sold driving data to brokers like Verisk Analytics and LexisNexis Risk Solutions. These brokers could then potentially use this information to help auto insurers set rates, sometimes increasing costs for drivers.

While California law typically prevents insurers from using driving data to raise rates, the lawsuit focused on GM’s nonconsensual sale of personal information. The complaint argued that GM violated privacy laws by sharing data that included people’s names, contact info, geolocation, and driving behaviors.

This case highlights the importance of data privacy laws in California, which aim to protect consumers from companies holding onto personal information and using it in ways they didn’t agree to. The settlement emphasizes that companies must be transparent and cautious when handling sensitive data.

California Attorney General Rob Bonta emphasized that the settlement pushes GM to stop illegal data practices and underscores the need for companies to limit data collection to only what is necessary. Moving forward, GM will need to implement stronger privacy measures to comply with state laws.

Inspired by

• https://www.engadget.com/2169135/gm-agrees-to-pay-12-75-million-to-settle-california-lawsuit-over-misuse-of-customers-driving-data/

Sources

• nytimes.com