By Jonathan Stempel
(Reuters) -General Motors has been sued by the state of Texas, which accused the automaker of installing technology on more than 14 million vehicles to collect driver data, which it then sold to insurers and other companies without the driver’s consent.
Texas Attorney General Ken Paxton said the lawsuit Tuesday stemmed from an investigation announced in June into whether several automakers collected and sold large amounts of data without driver knowledge.
Paxton said GM’s data was used to compile “Driving Scores,” which assessed whether more than 1.8 million Texas drivers had “bad” habits such as speeding, braking too quickly, cornering too sharply. steering, not using a seat belt and driving late at night.
Insurers could then use the data when deciding whether to increase premiums, cancel policies or deny coverage, Paxton said.
The technology would be installed on most GM vehicles beginning with the 2015 model year.
Paxton said it was GM’s practice for dealers to mislead unwitting consumers who had just completed the stressful purchasing and leasing process into believing that participation in the OnStar diagnostic products, which collected the data, was mandatory.
“Companies are using invasive technology to violate the rights of our citizens in unthinkable ways,” Paxton said in a statement. “Our investigation revealed that General Motors (NYSE:) engaged in egregious business practices that violated Texans’ privacy and violated the law. We will hold them accountable.”
GM said in an emailed statement: “We have been in discussions with the Attorney General’s office and are reviewing the complaint. We share the desire to protect consumer privacy.”
Texas filed its lawsuit in a state court in Montgomery County, near Houston.
It seeks the destruction of improperly collected data, compensation for drivers, civil penalties, and other remedies for violations of the Texas Deceptive Trade Practices Act.
