The State of Texas has filed suit against General Motors GM for allegedly collecting and selling driver data without their consent.

What happened: The lawsuit was announced by the Attorney General of Texas Ken Paxton on Tuesday. The lawsuit follows an investigation launched in June into several automakers over similar allegations.

Paxton announced that the investigation uncovered “egregious business practices” by General Motors that violated Texans’ privacy and violated the law. The company allegedly used technology installed in most GM vehicles made in 2015 or newer to collect, record, analyze and transmit detailed driving data. That data was then sold to multiple companies.

The lawsuit also alleges that General Motors misled its customers when signing up for its products, including the OnStar Smart Driver, by failing to inform them of the company’s true practices – namely, systematically collecting and selling their highly detailed driving data.

“We have had discussions with the Attorney General’s Office and are reviewing the complaint. We share the desire to protect consumer privacy,” a General Motors spokesperson said in a statement to The Hill.

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Why it is important: The lawsuit against General Motors comes amid increasing criticism of the car manufacturers’ handling of driver data. In July, US senators Ron Wyden (D-Ore.) and Ed Markey (D-Mass.) called on the Federal Trade Commission to investigate the automotive industry’s data-sharing practices.

They stressed the fear that companies like General Motors, Honda Motor Co HMCAnd Hyundai Motor HYMTF shared driver data with data brokers, potentially leading to higher insurance premiums for some drivers.

Earlier this year, reports emerged that internet-connected vehicles, including the Chevrolet Bolt, were recording driving patterns and sending that data to insurance companies. This practice resulted in higher insurance costs for some drivers and sparked further debate over privacy concerns.

In addition, General Motors is facing significant challenges with its global operations, particularly in China. The company is reportedly laying off staff and planning a structural restructuring to address declining sales and strong competition from local brands. Despite these hurdles, General Motors remains committed to maintaining stable liquidity in its Chinese operations.

Price promotion: General Motors stock closed at $43.32 on Tuesday, up 0.77% on the day. The stock lost 0.44% in after-hours trading. Year-to-date, GM shares are up 20.17%, according to data from Benzinga Pro.

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This story was created with Benzinga Neuro and edited by Kaustubh Bagalkote