GM Allegedly Spied On Drivers, Now It's Paying Out $220M

While GM has made quite a few reliable motors over the years, the company is far from squeaky clean. Recently, GM was accused of hiding serious truck defects from drivers, and it has also been accused of illegally harvesting data for years using its Smart Driver program. A settlement for the latter has been reached, and GM lost big time.

On October 29, the Office of the Attorney General in Washington State announced a $220 million settlement involving 36 attorneys general over GM's collection and sale of drivers' personal information. According to a press release, victims included around 370,000 drivers who were told they weren't enrolled. The data included user locations, how many times they drove their vehicles and for how long, and their braking and acceleration habits. This data might not sound important to the average person, but the attorney general's office emphasized that the information was "personal, identifiable, and specific."

GM will pay out $220 million as part of the settlement, $12.3 million of which will go to Washington.  The rest will go to other states that joined the lawsuit, including Oregon (which will receive $10.4 million), Michigan (which will receive $7.2 million), and New York (which will receive over $12 million). In addition to these fees, GM has been hit with quite a few new restrictions. For example, the automaker will be limited in the driving data it can collect going forward and must get drivers' permission before collecting or sharing information about their driving habits and locations. GM won't be left to police itself, either. Outside reviewers will also be checking whether the company is sticking to the new restrictions.

While 370,000 people were told they weren't enrolled in the Smart Driver program, potentially millions of drivers had their data collected and sold through OnStar — GM's proprietary vehicle connection service — between 2016 and 2024. The more customers who signed up, the more salespeople got bonuses and the higher their dealerships climbed GM's rankings, which is how the issue became so widespread. 

According to the lawsuit, GM was "heavily incentivizing" dealerships to make drivers sign up with OnStar (add this to the list of reasons why an OnStar subscription isn't worth it). Dealership employees were even accused of signing up customers for OnStar on their behalf — and without their consent. According to the Washington State attorney general's office, drivers were "quietly unenrolled" without them being any the wiser, yet the data on their driving habits remained with data brokers and insurance companies that jacked up some drivers' rates.

Previously, The New York Times published several exposés on GM's data collection scheme, including concerns that it had colluded with insurance companies to increase user premiums. These damning reports are cited as the main reason why GM shuttered the Smart Driver program. Going forward, GM will need the driver's express consent before collecting or sharing their driving and location data. And employees at GM dealerships will undergo training and receive oversight to ensure results.