Texas Attorney General Ken Paxton sued Allstate and its subsidiary, Arity (“Allstate”), for unlawfully collecting, using, and selling data about the location and movement of Texans’ cell phones through secretly embedded software in mobile apps, such as Life360. Allstate and other insurers then used the covertly obtained data to justify raising Texans’ insurance rates.
Allstate, through its subsidiary data analytics company Arity, would pay app developers to incorporate its software to track consumers’ driving 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.” When a consumer requested a quote or renewed their coverage, Allstate and other insurers would use that consumer’s data to justify increasing their car insurance premium.
These actions violated the Texas Data Privacy and Security Act (“TDPSA”), which created heightened protections for Texans’ sensitive data, including but not limited to precise geolocation information. The law requires clear notice and informed consent regarding how a company will use Texans’ sensitive data. Allstate never provided notice or obtained Texans’ consent to collect or sell their sensitive data. This is the first enforcement action ever filed by a State Attorney General to enforce a comprehensive data privacy law.
“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” said Attorney General Paxton. “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.”
This lawsuit follows Attorney General Paxton’s lawsuit against General Motors and his ongoing investigations into several car manufacturers for secretly collecting and selling drivers’ highly detailed driving data.
To read the filing, click here.
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