General Motors Settles Data Privacy Lawsuit
General Motors has agreed to a $12.75 million settlement to resolve a data privacy lawsuit filed in California. The suit accused the automaker of illegally selling driver location and behavior data to third-party data brokers. Under the terms of the agreement, GM will cease selling customer information to data brokers for a period of five years and will provide California drivers with the ability to opt-out of location data collection by its OnStar service.
This legal action follows a 2024 report by The New York Times, which highlighted the practice of several automakers, including GM, sharing sensitive driving data—such as speed, braking intensity, and acceleration patterns—with data brokers and insurance companies. This information was reportedly used to influence insurance premium calculations.
This settlement complements a separate agreement reached with the Federal Trade Commission (FTC) in January. That agreement also prohibits GM and its OnStar subsidiary from disclosing driver data to third-party brokers for five years, reinforcing a commitment to enhanced data protection.
As part of the California settlement, GM is now required to present clear and conspicuous privacy notices detailing its data collection practices to drivers who enroll in OnStar. The company must also delete all driver data that was the subject of the lawsuit and obtain explicit customer consent before collecting or utilizing any driving data.
GM spokesperson Charlotte McCoy stated in an email to The Verge, “This agreement addresses Smart Driver, a product we discontinued in 2024, and reinforces steps we’ve taken to strengthen our privacy practices. Vehicle connectivity is central to a modern and safe driving experience, which is why we’re committed to being clear and transparent with our customers about our practices and the choices and control they have over their information.”
California Attorney General Rob Bonta commented on the settlement, saying, “Today’s settlement requires General Motors to abandon these illegal practices and underscores the importance of data minimization in California’s privacy law — companies can’t just hold on to data and use it later for another purpose.”
Business Style Takeaway: This significant settlement highlights the increasing scrutiny on how companies handle consumer data, particularly in the automotive sector. For professionals and business travelers, it signals a move towards greater data transparency and control, potentially impacting the value proposition of connected car services and reinforcing the need for robust privacy policies across all industries.
Based on materials from : www.theverge.com