General Motors has reached an agreement to pay $220 million to settle a multi-state data privacy lawsuit brought by the attorneys general of 35 US states and the District of Columbia. The legal action centers on the automaker's Smart Driver program, which operated from 2016 through 2024. According to the state officials, GM enrolled millions of customers in the program and tracked their driving habits without obtaining proper consent.
The program collected specific data points such as hard braking, late-night driving, and speeding incidents. This information was subsequently sold to data brokers who supplied it to insurance companies. As a result, insurers reportedly raised premiums for individuals based on the data derived from the Smart Driver program. The attorneys general emphasized that GM failed to inform customers that their data would be sold for this specific purpose.
Investigations revealed that many drivers were unaware of their enrollment in the program. To boost participation, GM allegedly incentivized dealerships with bonuses to sign up as many customers as possible. In some instances, dealership employees reportedly accepted terms and conditions on behalf of customers without their express permission. Furthermore, more than 370,000 drivers were incorrectly told they were not enrolled despite actually being part of the program. Although GM eventually unenrolled these individuals, the company did not notify them of the error and continued to sell their data during that period.
As part of the settlement, GM is required to limit the driving data it collects from customers and enhance protections for personal information moving forward. The agreement mandates internal and external assessments of the company's data protection and privacy programs, along with additional oversight and training at its dealerships. This settlement follows a separate action earlier this year where the Federal Trade Commission banned GM from sharing specific consumer data with third parties for five years. Additionally, in May, the automaker reached a distinct $12.75 million settlement with California regarding similar issues.
Sources: Engadget.