Amid mounting criticism and the threat of legal action, General Motors (GM) has severed ties with two data firms it had been supplying customers’ driving data, following accusations of unauthorized data sharing.
The US automotive giant faced backlash after revelations surfaced regarding the unauthorized sharing of driving data with insurance companies by data brokers LexisNexis and Verisk without the drivers’ consent.
The controversy was ignited by an investigative report published by The New York Times, highlighting a Chevrolet Bolt owner’s experience of receiving a significantly inflated insurance renewal premium due to the sale of his driving data to insurance firms by LexisNexis.
Subsequently, a Cadillac XT6 owner, Romeo Chicco, initiated a proposed class action lawsuit against GM, LexisNexis, and OnStar, GM’s connected services brand, alleging denial of insurance by multiple companies based on data obtained from LexisNexis driving reports.
In response to the public outcry and legal challenges, General Motors swiftly terminated its partnerships with both LexisNexis and Verisk. A GM spokesperson confirmed to The New York Times that “OnStar Smart Driver customer data is no longer being shared with LexisNexis or Verisk,” emphasizing the company’s commitment to prioritizing customer trust and reevaluating its privacy policies and procedures.
Internal documents revealed that more than eight million vehicles were actively providing data through GM’s OnStar’s Smart Driver program as of 2022. Despite GM’s assertion that signing up for the Smart Driver service is voluntary, Mr. Chicco’s lawsuit alleges that he never consented to the recording and distribution of his driving data.
While GM maintains that OnStar Smart Driver is an optional service, offering benefits such as insights into safe driving behaviors and vehicle performance for insurance quotes with customer consent, privacy concerns remain.
Notably, plans to introduce OnStar in Australia through Holden vehicles were postponed, and it’s uncertain if the upcoming relaunch of Cadillac or the arrival of the GMC Yukon will introduce OnStar to the Australian market.
As the automotive industry grapples with the complexities of data privacy and consumer trust, GM’s actions underscore the growing importance of safeguarding customer data and ensuring transparent privacy practices in an increasingly connected world.
