Texas Sues Allstate Over Alleged Unlawful Data Collection

Texas Attorney General Ken Paxton has launched a lawsuit against Allstate and its subsidiary Arity for allegedly collecting and selling personal driving data of 45 million Americans without consent.

At a Glance

Texas sues Allstate and Arity for the covert collection and sale of driving data.
The lawsuit claims data was used to justify insurance price hikes.
45 million Americans were allegedly affected, including millions of Texans.
Violations of Texas Data Privacy and Security Act are alleged.
Civil penalties up to $10,000 per violation are sought in the case.

Texas Takes on Insurance Giant

In a significant legal move, Texas Attorney General Ken Paxton has filed a lawsuit against Allstate Corporation and its subsidiary Arity. The suit alleges that these companies unlawfully collected and sold sensitive driving and location data from over 45 million Americans, including millions of Texans. This action marks the first enforcement by a State Attorney General under a comprehensive data privacy law.

The lawsuit, filed in the District Court for Montgomery County, Texas, claims that Allstate and Arity embedded tracking software in mobile apps like Life360 and other third-party applications. This software allegedly collected sensitive information such as geolocation, speed, and driving behaviors without proper consent from users.

EXCLUSIVE: Red state sues insurer for using customer data to build ‘world’s largest driving behavior database' https://t.co/SdiyviYbQF

— Fox News (@FoxNews) January 14, 2025

Allegations of Data Misuse

According to the lawsuit, Allstate’s goal was to create the world’s largest driving behavior database. This data was reportedly sold to other insurers and used to justify increases in car insurance prices. The collected information could potentially label users as “bad” drivers, even if they were merely passengers in a vehicle.

The lawsuit alleges violations of the Texas Data Privacy and Security Act, the Data Broker Law, and the Texas Insurance Code. These laws require explicit consent for collecting or selling precise geolocation data. Paxton claims that Allstate failed to provide notice or obtain consent from Texans for such data collection and sale.

Potential Consequences and Demands

The Texas Attorney General’s office is seeking significant penalties and corrective actions. The lawsuit demands civil penalties of up to $10,000 per violation, deletion of unlawfully obtained data, and restitution for affected consumers. Additionally, it calls for measures to prevent future violations.

The implications of this lawsuit extend beyond financial penalties. The misuse or leakage of location data poses serious privacy and cybersecurity risks, including potential for stalking, identity theft, and unwarranted surveillance. Location data is particularly sensitive as it can reveal personal details such as health conditions, religious affiliations, and political views.

Broader Implications

This case is part of a broader effort by Paxton’s office to address privacy violations by major corporations. In August, the office also sued General Motors for allegedly selling private driving data to insurance companies. The lawsuit against Allstate and Arity highlights growing concerns about data privacy in the digital age and the responsibilities of companies handling sensitive information.

Arity claims to have access to data from over 45 million consumers. The outcome of this case could have far-reaching implications for data privacy practices across the insurance industry and beyond.