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Texas Cracks Down on Automakers Sharing Driving Data with Insurance Companies

Texas is taking a stand against automakers that collect and sell driver data without proper authorization or notice. This practice has raised significant concerns about privacy and data security. Leading the charge is Texas Attorney General Ken Paxton, who recently announced an investigation into these practices.

The Growing Concern Over Driver Data Collection

Modern vehicles are equipped with advanced technology capable of collecting extensive data points about the vehicle, the driver, and the surrounding environment. While this data collection can enhance the driving experience and improve vehicle safety, it also opens the door to potential misuse. Some automakers have been caught selling this data, often to the detriment of the vehicle owners. This misuse of driver data has caught the attention of authorities in Texas.

Attorney General Ken Paxton’s Investigation

Attorney General Ken Paxton is utilizing the state’s Deceptive Trade Practices—Consumer Protection Act to investigate carmakers that engage in deceptive acts by collecting and selling driver data without proper consent. This act empowers the attorney general to scrutinize companies for false, misleading, or deceptive practices. Paxton’s office has already requested information from the involved automakers and the third parties that have purchased this data.

Paxton described the unauthorized collection of driver data as “invasive” and “disturbing,” emphasizing the need for a thorough investigation and appropriate enforcement. His office’s investigation is a proactive step towards ensuring that automakers adhere to ethical data collection practices and respect consumer privacy.

Civil Investigation Demand Letters Sent

In April, Paxton’s office sent “civil investigation demand” letters to at least four automakers: Kia, General Motors, Subaru, and Mitsubishi. These letters demand that the companies disclose information about their data collection practices and the extent of their data sharing with third parties. The investigation aims to determine whether these automakers have been transparent with their customers about how their data is being used.

The Impact of Data Sharing on Consumers

The investigation was prompted by a report from The New York Times, which revealed that GM, Kia, Subaru, and Mitsubishi had shared driver data with a portal used by insurers. As a result, some GM drivers experienced increased insurance rates. This revelation has sparked widespread concern among consumers and lawmakers alike.

Additionally, US lawmakers have accused several other automakers, including Toyota, BMW, Nissan, Mazda, and Mercedes-Benz, of sharing vehicle location data with law enforcement agencies without a warrant or court order. This practice further intensifies privacy concerns and underscores the need for strict regulations governing data sharing.

The Role of Automobiles in the Surveillance State

The investigation highlights the complex role that modern automobiles play in the ever-expanding surveillance state. Cars today can record a vast array of data, including speed, braking effort, and even how long a driver looks at the infotainment screen. While this data can provide valuable insights for improving vehicle safety and performance, it also raises significant privacy issues.

Texas’ Influence on the Automotive Industry

Texas, like California, wields considerable influence in the automotive industry due to its size and market power. The state’s actions could set a precedent for other states to follow, potentially leading to stricter regulations on data collection and sharing practices nationwide. This move might be the saving grace for drivers who value their privacy and want to keep their driving habits confidential.

The Path Forward

As Texas continues its investigation, the automotive industry is likely to face increased scrutiny regarding its data practices. Automakers will need to be more transparent with consumers about what data they collect and how it is used. They will also need to implement stronger safeguards to protect driver data from unauthorized access and misuse.

New Data Privacy Law

Adding to the pressure on automakers, Texas has enacted a new data privacy law that will go into effect on July 1. This law aims to enhance consumer privacy protections and ensure that companies are held accountable for their data practices. Automakers operating in Texas will need to comply with this new law, which could lead to significant changes in how they handle driver data.

Texas’ crackdown on automakers that collect and sell driver data without proper authorization is a crucial step in protecting consumer privacy. Attorney General Ken Paxton’s investigation under the Deceptive Trade Practices—Consumer Protection Act signals a strong commitment to holding companies accountable for deceptive practices. As the investigation unfolds, it may lead to broader changes in the automotive industry’s approach to data collection and sharing, ultimately benefiting consumers and safeguarding their privacy.