Texas sues GM for allegedly violating drivers' privacy

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 data about drivers, which it then sold to insurers and other companies without drivers' consent.

Texas Attorney General Ken Paxton said Tuesday's lawsuit arose from a probe announced in June into whether several automakers collected and sold mass amounts of data without drivers' knowledge.

Paxton said GM's data were used to compile "Driving Scores" assessing whether more than 1.8 million Texas drivers had "bad" habits such as speeding, braking too fast, steering too sharply into turns, not using seatbelts and driving late at night.

Insurers could then use the data when deciding whether to raise premiums, cancel policies or deny coverage, Paxton said.

The technology was allegedly installed on most GM vehicles starting with the 2015 model year.

Paxton said GM's practice was for dealers to subject unwitting consumers who had just completed the stressful buying and leasing process into believing that enrolling in its 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 has engaged in egregious business practices that violated Texans' privacy and broke the law. We will hold them accountable."

GM did not immediately respond to requests for comment.

The lawsuit was filed in a Texas state court in Montgomery County, near Houston.

It seeks the destruction of improperly collected data, compensation for drivers, civil fines and other remedies for violations of the Texas Deceptive Trade Practices Act.

(Reporting by Jonathan Stempel in New York; Additional reporting by Ben Klayman in Detroit; Editing by Stephen Coates)