Innately, we as consumers know there is a trade-off to adding invasive technology to our daily lives, but General Motors is paying the price for going too far with the data it collects from drivers.
General Motors, the country’s largest automaker, agreed to settle a California class action lawsuit for $12.75 million over the company’s policy of selling the driving data from its OnStar vehicle assistance program to data brokers who could then market the data to auto insurers.
The settlement comes two years after The New York Times reported that OnStar’s “Smart Driver” program collected data on hard braking, late-night driving, and speeding and then sold that data to interested parties. The company said it collected data to promote safer driving behavior, but it was also collecting data that it then sold to brokers.
The report cited an OnStar user whose insurance payment rose by 21% based on his Smart Driver data.
GM discontinued Smart Driver shortly after The New York Times story and terminated its data-sharing agreements with LexisNexis and Verisk in 2024. But the damage had already been done.
The Federal Trade Commission soon launched an investigation, leading to a proposed five-year ban on GM and OnStar disclosing customers’ geolocation and driver behavior data to consumer reporting agencies.
While GM has officially settled its case in California, other states still seek damages for the invasion of privacy.
What does GM’s California OnStar Smart Driver settlement entail?
Despite discontinuing the program in 2024, General Motors is still paying for the mistake of selling sensitive driver data to brokers who then sold it to auto insurance companies.
The nearly $13 million settlement GM must pay California residents as part of the class-action lawsuit against it is only one of the stipulations of the agreement. GM must also delete any driving data it has retained for 180 days unless a customer gives express consent for the data to be shared, except in certain cases, such as for emergency responders.
GM must also allow its California customers to disable the company’s remote collection of all data from their vehicles if they decide not to enroll in OnStar, or if they unenroll from the program (though GM may still respond to a person pressing the OnStar button and use its driving data to answer their question).
GM will pay the fine to the California Attorney General’s Office within 30 days, and the state will disburse the money.
General Motors did not admit any liability and did not immediately return a request for comment from TheStreet.
Are GM’s OnStar legal troubles over?
As mentioned earlier, California is just one of the states that sued GM after The New York Times article. There are at least two other state class actions in Texas and Nebraska, and a separate class action lawsuit featuring nearly 40 individuals is also making its way through the courts.
The multiple individual lawsuits were consolidated into a single multidistrict litigation, IN RE: Consumer Vehicle Driving Data Tracking Litigation. On April 22, Judge Thrash of the Northern District of Georgia dismissed GM’s petition to have the lawsuit dismissed.
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The judge also denied GM’s motion to dismiss the plaintiff’s unjust enrichment claim and denied part of the company’s motion to dismiss the invasion of privacy, civil conspiracy, and Fair Credit Reporting Act claims. The judge’s ruling means that more than 40 claims against the company can continue.
The lawsuit alleges that GM has been collecting and transmitting driving data since model year 2015, and the Smart Driver program was launched in 2016. GM reportedly collected data on a bunch of driver behaviors, including each time a vehicle was started, and transmitted it to GM’s servers over the cellular network.
GM claimed that vehicle owners consented to data collection by using OnStar and that the terms of service still applied, even if customers did not read them.
Meanwhile, late last year, a judge ruled that Nebraska’s class-action lawsuit against the company could proceed.
Nebraska Attorney General Mike Hilgers sued General Motors for allegedly collecting and selling driver data to third parties without their consent.
“Thousands of Nebraskans have been driving GM vehicles that, unknown to them, surveil and track their vehicle usage data, which GM then sells for profit,” the lawsuit states.
“Nebraska law requires companies to be honest with consumers about how their products and services collect, use, and sell customer data. GM violated that fundamental duty to deal honestly in Nebraska by selling vehicles designed to surveil and track consumers’ use of GM vehicles for the purpose of profiting off the invasion of privacy of unsuspecting vehicle owners.”
Car tech is incredibly invasive in most modern vehicles
Modern cars are rolling surveillance machines, and car companies don’t make it easy to opt out of the matrix.
Tesla, for instance, is considered one of the most technologically advanced passenger cars in the world. Still, Privacy Not Included notes that the company itself says that opting out of certain data-collection programs may result in your vehicle suffering reduced functionality, serious damage, or inoperability.
Mozilla Foundation’s Privacy Not Included data privacy initiative calls modern cars a “privacy nightmare on wheels.”
“Many people think of their car as a private space — somewhere to call your doctor, have a personal conversation with your kid on the way to school, cry your eyes out over a break-up, or drive places you might not want the world to know about,” said Jen Caltrider, Privacy Not Included program director.
“But that perception no longer matches reality. All new cars today are privacy nightmares on wheels that collect huge amounts of personal information.”
Related: This is how Ford CEO Jim Farley “future proofs” F-Series trucks
