- Texas AG Ken Paxton sued Allstate and Arity for illegally collecting and selling driving data of over 45 million Americans without consent.
- Allstate allegedly embedded tracking software in third-party apps to monitor drivers' locations and movements in real time.
- The collected data was used to raise insurance premiums and sold to other insurers, profiting twice from consumers.
- The lawsuit claims violations of the Texas Data Privacy and Security Act, seeking injunctions and civil penalties.
- This landmark case could set a precedent for corporate accountability in data privacy and consumer protection.
Texas Attorney General Ken Paxton has filed a groundbreaking lawsuit against Allstate Insurance and its subsidiary, Arity, accusing the companies of illegally collecting, using, and selling the driving behavior data of more than 45 million Americans.
The lawsuit, filed Monday in Montgomery County, Texas, alleges that Allstate built the “world’s largest driving behavior database” by secretly embedding tracking software into third-party apps, enabling the company to monitor drivers’ locations and movements in real time. This data was then used to justify raising insurance rates and sold to other insurers, all without consumers’ knowledge or consent.
According to the lawsuit, Allstate and Arity began integrating tracking software into popular apps as early as 2015. When consumers downloaded these apps — often unaware of the hidden tracking technology — their driving data, including precise geolocation information, was collected and stored. Over time, Allstate amassed trillions of miles worth of data, creating what Paxton described as a “driving behavior database” that was used to profile and penalize drivers.
“Defendants never informed consumers about their extensive data collection, nor did they obtain consumers’ consent to engage in such data collection,” the lawsuit states. “Finally, Defendants never informed consumers about the myriad of ways they would analyze, use, and monetize their sensitive data.”
Profiting at consumers’ expense
The lawsuit alleges that Allstate not only used this data to justify raising insurance premiums for its own customers but also sold the information to third-party insurers. This practice allowed Allstate to profit twice: first by charging higher rates and second, by monetizing the data itself.
“Our investigation revealed that Allstate and Arity paid millions of dollars to install Allstate’s tracking software,” Paxton said in a statement. “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law. Texans deserve better, and we will hold all these companies accountable.”
A landmark privacy enforcement action
This lawsuit marks the first time a state attorney general has taken enforcement action under a comprehensive data privacy law. Paxton argues that Allstate’s actions violate the Texas Data Privacy and Security Act (TDPSA), which requires companies to provide clear notice and obtain informed consent before collecting or selling sensitive data, including precise geolocation information.
Paxton is seeking a permanent injunction to stop Allstate from continuing its data collection practices and is asking the court to impose civil penalties of thousands of dollars per affected customer. The lawsuit also highlights the broader implications of unchecked corporate data collection, particularly in an era where privacy concerns are increasingly at the forefront of public discourse.
Attorney General Ken Paxton’s lawsuit against Allstate is a bold move to hold corporations accountable for exploiting consumers’ personal data. By secretly tracking drivers and using that information to raise insurance rates, Allstate has not only violated Texas law but also eroded trust in the insurance industry. As Paxton stated, “Texans deserve better.” This case could set a precedent for how states address corporate overreach in the digital age, ensuring that companies prioritize transparency and respect for consumer privacy.
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