In recent months, Google has been engaged in a frenzied effort to resolve a backlog of legal disputes before facing major antitrust showdowns with the Justice Department later this year. April 01, 2024, Monday marked another milestone as the tech giant settled its fourth case in as many months. The agreement involved the deletion of billions of data records compiled about millions of Chrome browser users, as disclosed in a legal filing related to the suit, Chasom Brown, et al. v. Google. This lawsuit accused Google of misleading users by tracking their online activity in Chrome’s Incognito mode, which they believed would ensure privacy.
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Since December 2023, Google has expended well over $1 billion to settle various lawsuits as it gears up to confront the Justice Department’s allegations, particularly targeting Google’s search engine and advertising business. December witnessed Google resolving a suit with numerous attorneys general, alleging coercion of app makers into paying high fees. Shortly thereafter, the company settled another case alleging improper sharing of users’ private information from its defunct social media platform, Google+. In March, Google agreed to an undisclosed settlement with a Massachusetts company, Singular Computing, accused of patent design theft—a claim vigorously denied by Google.
Settlement Details:
- Google agreed to delete “billions” of data records reflecting users’ private browsing.
- Changes were made to disclosures, clarifying data collection practices.
- Incognito mode will block third-party cookies by default for the next five years.
- The settlement does not involve direct financial payouts to plaintiffs.
Google’s Incognito Mode Settlement: Privacy Wins, but No Direct Payouts
The resolution of the Incognito mode claims necessitated Google’s commitment to rewriting its disclosures to inform users about the collection of private browsing data. This commitment, outlined in the settlement filed with the U.S. District Court for the Northern District of California, mandated that users see the disclosure on the landing page when they open Incognito mode. Furthermore, Google agreed to maintain a change to Incognito mode for the next five years, blocking third-party cookies by default, thereby limiting users’ tracking by websites.
“This requirement ensures additional privacy for Incognito users going forward while limiting the amount of data Google collects from them,” stated the plaintiffs’ legal team, led by the prominent attorney David Boies, in the filing.
Google also pledged to discontinue the use of technology that detects when users activate private browsing, thus preventing the tracking of individuals’ choice to use Incognito mode. Although Google will not make direct payments to plaintiffs as part of the settlement, affected individuals retain the option to sue the company for damages.
Other Legal Challenges:
- Google has spent over $1 billion settling various lawsuits.
- Allegations from the U.S. Justice Department target Google’s search engine and advertising business.
- Recent settlements includes:
- A hefty $400 million settlement in 2022 to address allegations related to unauthorized tracking of users’ locations who had opted out of location services on their devices.
- A substantial $700 million settlement in December 2023 to resolve claims of stifling competition within its Play Store ecosystem on Android devices.
In response, Google asserted that the lawsuit was meritless, emphasizing its commitment to providing user privacy while innovating its services. Google spokesperson José Castañeda José Castañeda echoed the sentiment, highlighting that the settlement does not entail any financial payments from Google, while also affirming individuals’ retained rights to sue for damages: “We are pleased to settle this lawsuit, which we always believed was meritless. The plaintiffs originally wanted $5 billion and are receiving zero. We never associate data with users when they use Incognito mode. We are happy to delete old technical data that was never associated with an individual and was never used for any form of personalization.”
Users gain control with the ability to block third-party cookies
In contrast, attorneys representing Chrome users portrayed the settlement in a vastly different light, characterizing it as a significant triumph for personal privacy amidst an era of escalating digital surveillance. The attorneys valued the settlement between $4.75 billion to $7.8 billion, basing their estimations primarily on potential ad revenues that the personal data collected through Chrome could have generated both historically and in the future without the newly imposed restrictions.
Moreover, the settlement does not shield Google from further lawsuits pertaining to the same issues addressed in the class-action case, thereby enabling individual consumers to seek damages against the company by initiating their own civil complaints in state courts across the United States.
Scheduled to commence in early February’24, a trial loomed, yet by December, both parties had agreed to settle, averting the courtroom confrontation. “The settlement stops Google from surreptitiously collecting user data worth, by Google’s own estimates, billions of dollars,” remarked David Boies on Monday.
As part of the settlement, Google is mandated to allow incognito mode users to block third-party cookies for the next five years, a crucial stipulation in enhancing user privacy and control. “This settlement is a historic step in requiring dominant technology companies to be honest in their representations to users about how the companies collect and employ user data, and to delete and remediate data collected,” asserted the filing submitted by the plaintiffs’ attorneys.
Lawyer David Boies of Boies Schiller Flexner LLP, representing users in the legal battle, hailed the agreement as “a historic step in requiring honesty and accountability from dominant technology companies,” marking a notable triumph in the ongoing discourse surrounding privacy and accountability in the digital sphere.
Incognito Mode Deemed ‘Effectively a Lie’
The legal saga unfolded with allegations asserting that despite Google’s assertions to the contrary, the tech giant continued to track users’ activities even when they activated the “Incognito” mode in Google Chrome or utilized “private mode” in other browsers. A significant climax emerged from the courtroom revelations, where documents unveiled Google employees characterizing Incognito as “effectively a lie” and “a confusing mess,” as detailed in Monday’s court filing.
Judge Yvonne Rogers’ refusal last year to dismiss the case underscored the gravity of the accusations, as she deemed users did not consent to Google collecting information on their browsing activities. Now, the deal awaits court approval, marking a crucial turning point in the legal battle.
This settlement coincides with heightened scrutiny of big tech firms’ practices in the United States and globally. In the US, Google and its parent company Alphabet confront dual monopoly cases initiated by the federal government, signaling a profound shift in regulatory attitudes towards tech behemoths. Additionally, Google has recently resolved several other legal disputes, including a hefty settlement of nearly $400 million (£318 million) in 2022 to resolve allegations from US states regarding the unauthorized tracking of users’ locations who had opted out of location services on their devices. In December 2023, Google also agreed to a substantial $700 million (£557 million) settlement to address claims brought by a coalition of US states accusing the company of stifling competition within its Play Store ecosystem on Android devices.
Investors remain confident despite settlement terms impacting digital ad sales
Investors seem unfazed by the settlement terms, evidently confident that the impact on digital ad sales—accounting for the lion’s share of the over $300 billion in annual revenue flowing into Google’s parent company, Alphabet Inc.—will be negligible. Alphabet shares surged 3% on Monday, closing at $155.49, thereby catapulting the company’s market value to a staggering $1.9 trillion.
Investor Confidence:
- Despite the settlements, investors remain confident.
- Digital ad sales, which contribute significantly to Google’s annual revenue (over $300 billion), are expected to be minimally impacted.
- Alphabet shares surged 3% on Monday, closing at $155.49, resulting in a staggering market value of $1.9 trillion.
Austin Chambers, a legal expert specializing in data privacy matters at the esteemed firm Dorsey & Whitney, hailed the settlement terms in the Chrome case as a “welcome development” with potentially far-reaching implications for the future landscape of online data collection. “This prevents companies from profiting off of that data, and also requires them to undertake complex and costly data deletion efforts,” remarked Chambers. “In some cases, this could have a dramatic impact on products built around those datasets.”
Nevertheless, Google remains ensnared in legal crosswinds that could profoundly alter its business trajectory depending on the outcomes. The U.S. Justice Department’s allegations, accusing Google of leveraging the dominance of its search engine to stifle competition and innovation, loom large. Following a trial last fall, a federal judge is poised to hear closing arguments on May 1, with a ruling expected in the autumn.
