Texas sues General Motors for allegedly 'cheating' drivers and then selling their data

Texas formally sued General Motors. The state's attorney general, Ken Paxton, filed the lawsuit in a state district court in Montgomery County, alleging that the company tricked drivers into sharing their data and subsequently sold it to data brokers, thus violating the privacy rights of millions of Texans.

Paxton launched an investigation in June against several companies in the field, suspecting some illicit practices when collecting drivers' personal data, which, according to Politico, can be used for "urban planning purposes, but are also used for targeted advertising and to adjust insurance rates."

"General Motors deceptively collected scores of data points from consumers about their driving habits, monetized that data by selling it to other commercial actors, and permitted those actors to use the ill-gotten data to make adverse decisions when dealing with those same consumers," the lawsuit filed by the Republican attorney general states.

"They wanted to buy a car, not a comprehensive surveillance system"

According to the brief, the company used this data to assign risk scores to drivers, which affected their insurance rates without their knowledge. This affected more than 1.8 million Texans and 14 million vehicles. It is the first state lawsuit against an automaker for selling private data.

Paxton, who had an impeachment attempt in mid-2023, commented on the lawsuit on his X account, where he noted that General Motors "has engaged in egregious business practices that violated the privacy of Texans and violated the law," for which "we will hold them accountable."

"Companies are using invasive technology to violate the rights of our citizens in unthinkable ways. Millions of American drivers wanted to buy a car, not a comprehensive surveillance system that unlawfully records information about every drive they take and sells their data to any company willing to pay for it," he added.

The controversy with General Motors began in March when The New York Times revealed that the company shared sensitive driver data with data brokers, who then provided that information to insurance companies.

Months later, Senators Ron Wyden (D-OR)and Ed Markey (D-MA) followed up on the case and argued that the company did not have drivers' prior consent to share their personal data.