Alphabet Inc. (NASDAQ:GOOG) (NASDAQ: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 (NYSE:UBER), PayPal Holdings Inc.'s (NASDAQ:PYPL) Venmo and Meta Platforms, Inc.'s (NASDAQ: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. (NASDAQ: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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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
