Texas Attorney General Ken Paxton has filed a lawsuit against Allstate and its data subsidiary Arity for unlawfully collecting, using, and selling driving data from over 45 million Americans.
Read the full article at BleepingComputer
Summary of Allstate Lawsuit Over Unlawful Data Tracking
Quick Overview
Texas Attorney General Ken Paxton has initiated a lawsuit against Allstate Insurance and its data subsidiary, Arity, for allegedly tracking drivers without their consent. The lawsuit claims that the companies unlawfully collected, utilized, and sold driving data from over 45 million Americans, violating state privacy laws.
Key Points
- Allegations of Unauthorized Data Collection: Allstate and Arity are accused of embedding tracking code in popular mobile apps to gather sensitive location data without user consent.
- Impact on Insurance Pricing: The collected data was allegedly used to assess driving habits, which influenced insurance quotes and renewals, leading to potential price increases for consumers.
- Violation of Texas Laws: The lawsuit cites violations of the Texas Data Privacy and Security Act (TDPSA), the Data Broker Law, and the Texas Insurance Code.
- Request for Legal Remedies: The lawsuit seeks civil penalties, restitution for affected consumers, destruction of unlawfully obtained data, and injunctive relief against the companies.
- Response from Allstate and Arity: In response to the allegations, a spokesperson for Arity stated that their practices are compliant with laws and regulations, emphasizing consumer consent in data collection.
Detailed Breakdown
Allegations of Unauthorized Data Collection
The lawsuit alleges that Allstate and Arity paid app developers to integrate tracking software (Arity SDK) into widely used applications, such as Life360, GasBuddy, Fuel Rewards, and Routely. These apps, downloaded over 115 million times from Google Play, reportedly collected sensitive location data every 15 seconds, contingent on users granting location permissions.
Impact on Insurance Pricing
According to the Texas AG’s announcement, Allstate utilized the amassed data to build “the world’s largest driving behavior database.” This database enabled the company to adjust insurance premiums based on individual driving habits, which could result in higher costs for consumers. The announcement highlighted that when consumers requested quotes or renewed their coverage, their driving data was used to justify increases in insurance premiums.
Violation of Texas Laws
The lawsuit asserts that Allstate and Arity’s data practices contravene the TDPSA, which mandates user consent for data collection. Additionally, the legal action points to violations of the Data Broker Law and the Texas Insurance Code, which governs unfair and deceptive practices in the insurance industry.
Request for Legal Remedies
The lawsuit outlines several remedies, including:
- Civil penalties of up to $7,500 per violation under the TDPSA and $10,000 under the Texas Insurance Code.
- Restitution for consumers who experienced financial losses due to the alleged practices.
- Destruction of all unlawfully obtained data, including that held by third parties.
- Injunctive relief to prevent Allstate and Arity from continuing their current data collection practices.
Response from Allstate and Arity
Following the lawsuit’s announcement, a spokesperson for Arity defended the company’s practices, asserting that they help consumers obtain accurate auto insurance pricing after obtaining consent in a transparent manner. They emphasized compliance with all applicable laws and regulations.
Notable Quotes & Data
- “Allstate collected trillions of miles worth of location data from over 45 million consumers nationwide and used the data to create the world’s largest driving behavior database.”
- The lawsuit mentions that the tracking software integrated into apps collected data every 15 seconds, raising significant privacy concerns.
Context & Implications
This lawsuit highlights growing concerns over data privacy and the ethical implications of data collection practices by major corporations. As consumer awareness of data privacy issues increases, the legal outcomes of this case could set important precedents for how insurance companies and app developers handle user data. The case underscores the need for greater transparency and consent in data collection practices, especially in industries that rely heavily on sensitive personal information. The implications may extend beyond Texas, potentially influencing regulations and consumer protection laws nationwide.
In summary, the legal action against Allstate and Arity raises critical questions about privacy rights and the responsibilities of companies in handling consumer data, signaling a potential shift in how data-driven business practices are regulated.