General Motors to Pay $220 Million Over Driver Data Sales
General Motors (GM) will pay $220 million to 35 US states and the District of Columbia to resolve a legal dispute regarding the improper sharing of vehicle owner data. The case concerns the company's Smart Driver service, which collected information and transmitted it to third-party organizations, including insurance companies.
The Problematic Service and Data Leak
Smart Driver was launched in 2015 as part of the OnStar system. GM marketed it to consumers as a tool to promote safe driving, tracking details such as sudden braking, acceleration, speeding, duration of night driving, and seatbelt usage. However, investigations revealed that the company sold this data to data brokers, specifically Verisk Analytics and LexisNexis Risk Solutions.
Consequently, insurance companies used this data to create driver ratings, leading to increased insurance premiums for many customers. According to case documents, GM earned more than $20 million through this practice. Additionally, the company collected precise vehicle location data every three seconds, which was also licensed to third parties.
Opaque Practices at Dealerships
The investigation revealed that most drivers signed up for the service at dealerships when purchasing their vehicles. GM provided bonuses to dealers based on how many customers they registered for Smart Driver. In many instances, dealers checked the consent boxes on behalf of the clients. Those who refused the terms were allegedly warned that they would lose access to accident assistance and emergency response services.
The scandal became public in early 2024, after which General Motors officially discontinued the Smart Driver function. Under the new settlement, the company is required to obtain clear consent from drivers before collecting and sharing data in the future. Furthermore, GM must implement a strict data privacy program and ensure that dealership staff receive proper training.
What This Means for Consumers
Although the company did not admit wrongdoing, this settlement serves as a significant signal to automakers increasingly reliant on connected car data. Today, GM states that it no longer sells information that can be linked to a specific individual. However, the sharing of general data that does not identify the driver continues.
For readers in Georgia, where the number of modern, internet-connected vehicles is growing, such precedents serve as a reminder that a car is not just a mode of transport today, but a powerful data-collection platform. Consumers should pay close attention to the terms they activate in their vehicle's multimedia systems or accompanying applications.