Google’s misleading and deceptive conduct on Australian consumers leads to a $60 million penalty

Recently, the Federal Court of Australia ruled in favour of the Australian Competition & Consumer Commission (ACCC) in their case against Google for breaching Australian Consumer Law (ACL) by misleading Android phone users into believing Google was not collecting personal location data of its users through the Android operating system. 

In August 2022, the Court handed down their judgment ordering Google to pay $60 million in penalties over misleading Android users on the collection of their personal location data.

Facts on the ACCC -v- Google Case – 

This case began in 2019 when the ACCC brought a case against Google alleging that the tech giant had engaged in misleading and deceptive conduct with Android phone users. Google was allegedly making false and misleading representations to Android phone users regarding the collection, storage and use of customers’ personal location data. The false and misleading representation revolved around two settings within the Android operating system – the ‘Web & App Activity’ and ‘Location History’. 

The ACCC’s main argument was that users who saw the ‘Location History’ setting turned off, would believe that Google would not be able to collect their personal location data. However, the ‘Web & App Activity’ setting also allowed Google to collect personal location data even after the ‘Location History’ setting was turned off. 

The ACCC argued that users were misled by Google into believing that ‘Location History’ was the only setting that influenced the collection of personal data. In addition to this, users were misled by Google’s lack of representation regarding the collection of personal location data through the ‘Web & App’ setting. 

The Court held that the information represented by Google to Android phone users was insufficient to properly notify them of the collection of their personal location data. Therefore, Google’s conduct amounted to misleading and deceptive conduct in relation to these main groups: 

  • Users with heightened concerns about their data security that were misled by Google’s ‘Privacy and Terms’ policy; 
  • Users who turned off their ‘Location History’ were misled into believing that this was the only setting that allowed for the collection of personal location data; and 
  • Users who were misled by Google’s ‘Privacy and Terms’ policies representation of the ‘Web & App’ setting regarding the collection of personal location data.

Importance of the Court’s Decision – 

After the judgment in the Google case, the ACCC Chair, Gina Cass-Gottlied, made the following statement: 

This significant penalty imposed by the Court today sends a strong message to digital platforms and other businesses, large and small, that they must not mislead consumers about how their data is being collected and used.”

It is clear that the Court’s decision provides guidance on what information needs to be presented by companies on data collection to ensure that consumers are not misled and shows that there needs to be a level of transparency between companies and consumers regarding data collection. The Court determined that it was reasonable to assume that consumers would not read and understand the terms and conditions of a private policy document. Therefore, companies cannot hide behind the defence that consumers are able to access the necessary information through links or separate polices, so it is essential that any privacy policy summaries and pop-up screens provide a clear summary that consumers can rely on. 

Takeaways – 

Most companies today regardless of their size or business collect user data to better understand customer needs and boost customer engagement. Company websites usually collect user information through cookies and other tools to better understand the customer’s online presence and preferences. Therefore, a level of transparency between companies and consumers would be beneficial as it would ensure that all relevant information is disclosed, allowing consumers to make properly informed decisions. 

Overall, if you run your own business, you should consider the way in which your customers are informed of how personal companies should consider the way in which their consumers are informed of how personal information is collected, used, and stored to minimise the risk of the ACCC taking similar action against you. 

Our Services – 

Salerno Law’s Business and Commercial Team have extensive experience in advising owners, executives and managers of start-ups, SMEs, private equity firms, not-for-profits, indigenous corporations and large corporations across all commercial and legal areas. Our team takes the time to establish and maintain meaningful relationships with their clients with the objective of becoming the long-term trusted business advisers for their clients. Establishing such a relationship assists us in identifying our client’s unique objectives, risks, and challenges and to provide our services accordingly.

Contact one of our offices today to discuss any legal issues or questions you may have on data privacy or misleading and deceptive conduct under the ACCC.

Written By Gabriel Tirol