State lawsuit targets Smart Driver data usage
GM will pay $220 million to settle a lawsuit filed by the District of Columbia and 35 states after attorneys general joined together to sue the automaker over its "Smart Driver" data practices. In 2024, it emerged that GM had been sharing Smart Driver data with brokers who then sold that sensitive information to insurance companies. This practice caused insurance premiums to rise for several drivers who claimed they had no knowledge of ever agreeing to share such data for those specific purposes, resulting in unintended and unexpected financial burdens.
GM marketed the Smart Driver system as a way for parents to monitor teen drivers or for adults to track their own driving behavior to ensure driver safety. The system was intended to provide useful insights for drivers, but instead, it became a source of unexpected costs. The company’s sale of this information was a direct betrayal of their loyal consumers.
| Agreement Type | Involved Parties | Specific Terms |
|---|---|---|
| State Settlement | 35 states and District of Columbia | $220 million payment |
| FTC Settlement | GM and OnStar | Five-year ban on sharing geolocation or driver behavior data |
Previous FTC restrictions and new oversight
The automaker reached terms with the states following the prior legal agreement with the FTC. Last year, GM and its OnStar subsidiary entered into a settlement with the FTC that prohibited them from sharing certain kinds of driver behavior data with third parties. The FTC finalized this settlement this January, which bans the two companies from sharing geolocation data or driver behavior data with third parties for a total period of five full years. GM also discontinued the Smart Driver system across its entire vehicle range following that previous legal agreement.
TechCrunch reports that the settlement with the states carries weight because a third party will be required to make the determination that GM complies with its own privacy policy and standards. GM told Reuters that "[s]afer, more helpful and personalized experiences are enabled by connected vehicle data, and GM is committed to being clear about what information is used, how it’s protected, and the choices customers have about what they share."
