Google Ordered To Pay $425 Million In Privacy Class Action, Company Says Data Was 'Nonpersonal' And Stored Securely
Alphabet Inc. has been ordered to pay $425 million after a jury found it violated user privacy by collecting data despite account tracking settings being off. The class action, covering 98 million users, alleged Google accessed data through third-party apps for eight years, undermining privacy assurances. Although plaintiffs sought over $31 billion, the jury awarded a fraction. Google denied wrongdoing, claiming the data was nonpersonal and securely stored. This verdict follows other privacy battles and comes alongside a separate antitrust ruling allowing Google to retain its search engine status on Safari.
Alphabet Inc. GOOG GOOGL has been ordered to pay $425 million after a federal jury ruled that Google violated user privacy by continuing to collect data even when account tracking settings were switched off.
Jury Finds Google Violated Privacy Promises
The verdict, delivered Wednesday in San Francisco federal court, centered on Google's Web & App Activity setting, which millions of users believed disabled data collection, reported Reuters.
Plaintiffs alleged that for eight years, Google still accessed data through third-party apps such as Uber Technologies UBER, PayPal Holdings Inc.'s PYPL Venmo and Meta Platforms, Inc.'s META Instagram, undermining its own privacy assurances.
The class action, first filed in 2020, covers roughly 98 million users and 174 million devices. Jurors found Google liable on two of three privacy claims but determined the company had not acted with malice, eliminating the possibility of punitive damages.
Google denied wrongdoing, arguing that the data it collected was "nonpersonal, pseudonymous and stored in segregated, secured, and encrypted locations."
$31 Billion In Damages Sought, $425 Million Awarded
While plaintiffs initially sought more than $31 billion, the jury awarded a fraction of that sum. A Google spokesperson acknowledged the verdict, the report said.
This case adds to the company's growing list of privacy battles.
Earlier, Google agreed to a nearly $1.4 billion settlement with Texas over alleged privacy law violations and, in a separate case, agreed to destroy billions of browsing records to resolve claims that it tracked users in "Incognito" mode.
Antitrust Ruling Overshadows Privacy Lawsuit
The privacy verdict comes just one day after U.S. District Judge Amit Mehta issued a separate decision in Google's high-profile antitrust case.
The judge ruled the company will not be forced to divest Chrome or its Android operating system, calling the Department of Justice's breakup proposal overreaching.
Apple Inc. AAPL also saw its shares rise after Mehta allowed Google to continue paying billions to remain the default search engine on Safari browsers.
However, Google must still share some search data with rivals, a ruling it plans to appeal.
Price Action: Alphabet's Class A stock rose 0.34% in after-hours trading, while Class C shares gained 0.35%, according to Benzinga Pro.
Benzinga's Edge Stock Rankings show that GOOGL continues to demonstrate a strong trajectory across short, medium and long-term periods. Additional performance details are available here.
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