FOLLOW US

AUSTIN, Texas — Texas Attorney General Ken Paxton has initiated an investigation into car manufacturers over their data collection and sharing practices, focusing on whether they are selling drivers' data to third parties, including insurance providers, without proper disclosure. This move marks the latest effort by state authorities to address growing concerns over data privacy in the automotive industry.

Paxton announced Thursday that his office has directed several car manufacturers and their business partners to produce documents detailing their data collection and sharing activities, as well as the extent to which they inform customers about these practices. The companies under investigation were not disclosed.

"The technology in modern vehicles enables manufacturers to collect millions of data points about the people driving them," Paxton said. "Recently, consumers have grown extremely concerned that their driving data is being reported to their insurance company without their knowledge or authorization. These reports of the invasive and unmitigated collection and sale of data without consumer consent are disturbing, and they merit a thorough investigation and appropriate enforcement."

The investigation is being conducted under the Texas Deceptive Trade Practices Act, which allows the attorney general to pursue companies engaged in false, misleading, or deceptive practices. Paxton's inquiry follows his recent announcement of a new team within his consumer protection division dedicated to enforcing the state's data privacy laws, including the forthcoming Data Privacy and Security Act, set to take effect on July 1.

This new team, described by Paxton as "one of the largest in the country focused on enforcing privacy laws," will oversee the enforcement of various state data protection regulations, including the Biometric Identifier Act and the Deceptive Trade Practices Act.

The investigation was sparked by reports that car manufacturers have been secretly collecting extensive data from drivers through their vehicles and selling this information to insurers and other companies without customer consent. General Motors (GM) has faced several proposed class actions alleging that it used its OnStar units to collect driver data and passed it on to data broker LexisNexis Risk Solutions, which then sold it to insurers.

A New York Times report in March highlighted that GM's data sharing through OnStar's Smart Driver app led to higher auto insurance premiums for some individuals. In response, GM announced in April that it would discontinue the Smart Driver program and unenroll customers over the coming months.

"Customer trust is very important to us, which is why we are taking decisive actions to enhance our privacy processes and policies," a GM spokesperson said.

The automotive data privacy issue has also drawn attention from other state and federal authorities. Last August, California's privacy agency began investigating connected-car manufacturers' data collection and disclosure practices. Similarly, Connecticut's attorney general is scrutinizing these practices, and the U.S. Department of Commerce is considering regulations to address data privacy and security risks posed by imported vehicles with advanced data systems.

Consumer advocacy groups have echoed these concerns. A report from the Mozilla Foundation described modern vehicles as "a privacy nightmare," prompting congressional inquiries. Sen. Edward Markey, D-Mass., has called for automakers to implement stronger privacy policies and urged the Federal Trade Commission to investigate the industry's data practices.

"Consumers should not be subject to a massive data collection apparatus, with any disclosures hidden in pages-long privacy policies filled with legalese," Markey said. "The auto industry cannot become yet another domain that tracks and targets consumers."

Paxton's investigation underscores the increasing scrutiny on car manufacturers' data practices and the broader push for stronger data privacy protections across various industries.