GM Agrees to $12.75M Settlement in California Driver Privacy Case

General Motors has agreed to a significant $12.75 million settlement in California, resolving allegations that it illegally sold drivers' personal data without their knowledge or consent. This privacy-related agreement was reached with a coalition of law enforcement agencies, spearheaded by California Attorney General Rob Bonta, marking a crucial step in protecting consumer data in the automotive industry. The core of the complaint, which echoes a 2024 New York Times report on automakers sharing customer driving behavior, centered on GM's alleged practices. Bonta's office specifically claimed that GM sold "the names, contact information, geolocation data, and driving behavior data of hundreds of thousands of Californians" to data brokers Verisk Analytics and LexisNexis Risk Solutions. This data, reportedly collected through GM’s OnStar program, generated approximately $20 million in sales for the company. As part of the comprehensive settlement, GM has committed to several key actions. Beyond the $12.75 million civil penalty, the automaker has agreed to cease selling driving data to any consumer reporting agencies for a period of five years. Furthermore, GM must delete any driver data it still retains within 180 days, unless explicit customer consent is obtained, and is required to request that LexisNexis and Verisk also delete the shared data. Attorney General Bonta emphasized the gravity of GM's actions, stating, "General Motors sold the data of California drivers without their knowledge or consent and despite numerous statements reassuring drivers that it would not do so." He added that the settlement "requires General Motors to abandon these illegal practices and underscores the importance of the data minimization in California’s privacy law." Interestingly, Bonta's office clarified that despite the data sales, this particular practice did not lead to increased insurance prices for California drivers. This outcome is attributed to California's robust insurance laws, which explicitly prohibit insurers from using driving data to set rates. This settlement follows a previous agreement between GM and the Federal Trade Commission (FTC) concerning similar data sales, which resulted in a final order banning GM and OnStar from selling certain data to consumer reporting agencies. In response to the settlement, General Motors issued a statement acknowledging that the agreement "addresses Smart Driver, a product we discontinued in 2024, and reinforces steps we’ve taken to strengthen our privacy practices." The company reiterated its commitment to transparency, stating it is "committed to being clear and transparent with our customers about our practices and the choices and control they have over their information." This case highlights the growing scrutiny on how vehicle manufacturers handle sensitive driver data and sets a precedent for greater accountability in data privacy.