Tesla Data Privacy Scandal Generates Its First Lawsuit, But Is It Too Soon?

Business Insider broke the news about the lawsuit on April 8, reporting that Henry Yeh hired the Fitzgerald Joseph LLP law firm to represent him and all people who owned a Tesla from 2019 until now. That may make it a class action if the judge considers that to be applicable. The lawsuit states that the number of affected customers is so large that this is the only remedy that could protect them all. It also reputes that the compensations would be too small individually for them to pursue legal action on their own.

Apart from Reuters, Business Insider managed to confirm that former Tesla employees shared embarrassing videos from customers in the company’s internal messaging system. The videos and images were taken in traffic situations – which is not that surprising, considering Tesla’s dashcam – and also inside the client’s garages. It is not clear if the videos and images were taken when customers activated Sentry Mode or if the vehicles recorded them regardless of any feature being turned on.

Yeh’s lawyers said it is not unlikely that these former Tesla employees have shared the intimate images elsewhere, eventually on social media. At this point, there is no proof that this was the case. However, the longer it takes to verify that, the more unlikely it will be to confirm if that is true or not. This must be the reason for such a quick lawsuit.

So far, the only evidence that anything happened is what former Tesla employees told Reuters and Business Insider. If the only documentation that these guys shared private videos and images is on Mattermost, the sooner it is requested, the better. The question now is whether Tesla still has a backup showing these videos and pictures were shared. If it is legally required to keep them, they must still exist. If that is not the case, all this may be long lost.

In such a scenario, all the lawyers could have would be testimonials from people who worked for Tesla at the San Mateo data labeling office. Although Reuters and Business Insider were lucky to contact people willing to speak about that, the law firm going after that info may fail to obtain it. The press has the constitutional right to protect its sources, especially if they asked for anonymity and were afraid of retaliation.

That said, suing Tesla as fast as possible was the best way to ensure access to evidence. The court in charge of this judgment may demand the EV maker to present files, documents, hard drives, and anything else that may confirm the data privacy breach Reuters revealed. Tesla may try to escape that by proposing a deal, which was how the EV maker avoided presenting evidence in another class action.

After some Model S units caught fire, especially one in Shanghai in April 2019, Tesla released over-the-air (OTA) updates that capped the voltage of cells in thousands of vehicles. Their owners started a class action that would have forced Tesla to disclose why it capped the voltage of these vehicles. Unfortunately, Tesla proposed a deal that the owners accepted and which ended the lawsuit in exchange for a compensation of $625 for each of them. Many are now being surprised by errors and the information that they need to replace the battery packs in their cars.

If this new lawsuit against Tesla gets class-action status, it may follow a similar script, crowned by Elon Musk stating that “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.” It took his company two years with the voltage cap situation to realize it was not supposed to fight because the customers were right to complain. Ironically, Musk never cared to explain why they were right and why Tesla capped the voltage in their vehicles.

Any blow for Tesla in the new data privacy lawsuit will seriously interfere with Autopilot, Full Self-Driving, and even Park Assist. Musk insisted only cameras were necessary despite Tesla engineers arguing that the company should not ditch ultrasonic sensors. It did not work, and clients now complain about how unreliable Park Assist now is after being unavailable for months.

If a verdict restricts the use of cameras, Tesla may have to review its strategy. I would not be surprised if it started to include sensors like LiDAR to achieve its autonomy goals. One thing is for sure: data privacy regulations in the U.S. will become more stringent, perhaps even close to those adopted in the European Union.