
The Texas Attorney General has filed a lawsuit against the insurance company Allstate and its subsidiary Ariti. They are accused of collecting and selling data on the geographic location and movement of more than 45 million Americans without their knowledge and consent, in violation of data privacy laws.
According to the lawsuit, Ariti, an Allstate subsidiary, used hidden software built into its mobile app to collect data. The software allowed the company to track the user’s location in real time, record speed, time and place of start and end of trips, and other driving parameters. This data was sold to other insurers, who, in turn, used it to determine insurance premiums. The case is the first application of the new data privacy law in Texas. In addition to violating that law, Allstate is also accused of failing to comply with the Data Brokers Act and violating the Texas Insurance Code. Aliti’s affiliated companies include such well-known brands as Toyota, Lexus, Mazda and Dodge. The lawsuit alleges that they shared driver data and created “the world’s largest database of driver behavior.”
Ariti started its data collection activities in 2017. Last fall, the Texas Attorney General already warned several mobile apps, including GasBuddy, Life360 and SiriusXM, of possible legal violations because of their work with Ariti. Despite this, the companies continued to operate, leading to the current lawsuit; a previous lawsuit against General Motors, filed in August, also related to the illegal collection of data on 1.8 million drivers in Texas.
The case illustrates the huge privacy threat posed by opaque data sharing between mobile apps and insurance companies. Texas authorities require Allstate and Ariti to delete all data collected, stop such practices and compensate users for their losses.