General Motors has reached an agreement in California to pay $12.75 million and settle a lawsuit that accused it of selling driving habit information to insurance companies. The practice, which affected drivers of vehicles equipped with the OnStar system, would have allowed insurers to adjust premiums without the explicit consent of users.
OnStar and the real-time location data business 🚗
The OnStar system, present in millions of GM vehicles, collects location, speed, and braking data. According to the agreement, the company will not be able to sell this information to data brokers for five years. Additionally, California drivers will be able to disable location data collection. The case exposes how automakers can generate additional revenue from the information users generate while driving, without their knowledge.
Your car rats you out: insurance knows if you brake or accelerate ⚠️
Imagine your car is a four-wheeled snitch. While you think OnStar only helps you with navigation, it's actually whispering to insurers whether you're a calm driver or a kamikaze. Luckily, now in California you'll be able to shut the system up. Of course, outside the state, your car will still have more lip than a used car salesman.