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General Motors agrees to pay $220 million to settle multi-state data privacy lawsuit

The automaker sold driver data to insurance companies without permission from 2016 through 2024.

The states that sued General Motors over the whole OnStar Smart Driver program debacle have settled with the company. GM has agreed to pay $220 million to resolve the lawsuit brought by the attorneys general of 35 US states and the District of Columbia.

If you'll recall, The New York Times reported in 2024 that GM had enrolled millions of customers to its Smart Driver program from 2016 through 2024 and then tracked their driving habits. The automaker used Smart Driver to log data on hard braking, late night driving and speeding and then sold the information to data brokers for insurance. As a result, insurance companies raised premiums for people based on information from the program.

GM didn't tell its customers that their data would be sold for that purpose, the attorneys general said. Apparently, a lot of drivers weren't even told they were part of the program. The automaker was incentivizing dealerships with bonuses to sign up as many customers for Smart Driver as possible. Sometimes, dealership employees would allegedly just accept its terms and conditions for customers without their express permission.

In addition, GM didn't always notify customers about their enrollment. The AGs said that more than 370,000 drivers were told that they were not enrolled, even though they actually were. The automaker did unenroll them eventually, but it didn't notify them about the mistake and still sold their data. The data GM collected was "personal, identifiable and specific," the AGs wrote.

GM is required to limit the driving data it collects from customers and protect their personal information going forward, as part of the settlement. The company will also be subjected to mandated internal and external data protection and privacy program assessments, as well as oversight and additional training at its dealerships. Earlier this year, the Federal Trade Commission banned GM from sharing specific consumer data with third parties for five years due to the issue. In May, the automaker reached a separate settlement with California for $12.75 million.