General Motors agrees to $220 million settlement over customer data sale

General Motors has agreed to pay $220 million to settle a class‑action lawsuit after it was revealed that the automaker sold data from its “SmartDriver” telematics program to insurance companies without drivers’ explicit consent. The settlement, announced on Tuesday, covers owners of GM vehicles equipped with the system between 2015 and 2022 who discovered their speed, braking and location information had been shared with third‑party insurers.

The controversy stems from a broader debate over how automakers collect and monetize vehicle data. GM’s SmartDriver, introduced to offer drivers discounts for safe habits, logged detailed driving metrics that insurers could use to price policies more accurately. Critics argue that such practices violate privacy expectations, especially when consent forms are vague or buried in lengthy terms of service. The issue gained national attention after a consumer advocacy group filed a complaint in 2023, prompting a federal investigation that found GM had not provided clear opt‑out options.

In the settlement, GM will create a $150 million fund to reimburse affected drivers for any increased insurance premiums, while the remaining $70 million will cover legal fees and a $10 million civil penalty imposed by the Federal Trade Commission. The company also pledged to overhaul its data‑sharing policies, adding a transparent consent dashboard in its OnStar app and limiting future sales of raw driving data. Insurance partners, including several major U.S. carriers, have said they will continue to receive aggregated, anonymized data under stricter privacy safeguards.

The agreement signals a shift in how the auto industry handles consumer data as lawmakers consider new federal privacy legislation. GM’s move may set a precedent for other manufacturers that collect telematics information. Watchdog groups say the settlement is a step forward but will monitor whether the promised changes are fully implemented. The case also puts pressure on insurers to rethink data‑driven pricing models that rely on granular driver behavior.