News - GM Settles $220M Lawsuit Over Secretive Data Collection

General Motors (GM) has concluded a significant legal battle involving its OnStar Smart Driver program, settling a lawsuit brought by 35 U.S. states and the District of Columbia for $220 million. This lawsuit stemmed from allegations that, between 2016 and 2024, GM covertly enrolled millions of customers into the Smart Driver program. The program tracked detailed driving behaviors, such as hard braking and speeding, without the drivers' informed consent, and then sold this data to third-party brokers, resulting in increased insurance premiums for affected individuals. According to the allegations, GM's practices were conducted under a veil of secrecy. Many customers were unaware of their participation in the program due to opaque enrollment processes at dealerships, further complicated by incentives offered to dealerships for participant sign-ups. In many instances, dealership staff allegedly accepted terms on behalf of customers without permission. Furthermore, around 370,000 drivers were misled about their enrollment status; they were assured they were not part of the program when, in reality, they were. GM eventually rectified these enrollments but continued to sell the data without customer notification. The nature of the data—personal, identifiable, and specific—was at the core of the lawsuit allegations. In settling the lawsuit, GM is compelled to alter its data practices. The settlement imposes stringent limits on data collection methods and obligates GM to adopt comprehensive privacy protections. Going forward, the company will be subject to rigorous internal and external audits, with requirements for enhanced training and data protection strategies at its dealerships. This legal resolution follows a separate action earlier this year, when the Federal Trade Commission barred GM from sharing consumer data with third parties for five years due to similar privacy concerns. Additionally, GM reached a $12.75 million settlement with the state of California for related issues.