After concluding a deal with the Federal Trade Commission this year regarding the sharing of vehicle operators' information with data intermediaries, General Motors has finalized another agreement in the state of California. The automaker will pay $12.75 million in fines to address the action initiated by Attorney General Rob Bonta representing California residents, and it faces a five-year prohibition on transferring driving details to credit reporting firms. These legal challenges arose from a 2024 investigation by The New York Times, which exposed how GM gathered user driving information via its OnStar service and passed it along to brokers like Verisk Analytics and LexisNexis Risk Solutions, enabling them to offer the details to insurance providers for the automotive sector.
Insurers sometimes leverage such vehicle usage records to raise policyholders' premiums. Yet in California, state regulations prevent insurance companies from incorporating this type of information into rate calculations. Still, the legal filing claims that General Motors breached user confidentiality by distributing sensitive details—such as individuals' identities, communication details, location tracking, and habits behind the wheel—without proper authorization.
Under the terms of the accord, General Motors is obligated to erase all stored driving records within 180 days, aside from specific approved company purposes, absent explicit permission from the affected individuals. Additionally, the firm must establish a comprehensive privacy initiative to evaluate potential hazards associated with OnStar data gathering and submit updates to the Department of Justice along with relevant authorities. In remarks issued on Friday, Bonta emphasized that the resolution compels General Motors to cease these unlawful activities and highlights the principle of restricting data retention under California's privacy regulations, meaning businesses cannot retain information indefinitely for future applications.