Google fined $60m for misleading use of consumer location data

ACCC case through Federal Court is the first public enforcement outcome to arise out of its Digital Platforms Inquiry

Google LLC has been ordered to pay $60 million in penalties by the Federal Court for misleading consumers about use of their personal location data under the first public enforcement outcome to arise out of the ACCC’s Digital Platforms Inquiry.

The Federal Court penalty notice issued on 12 August follows action instigated by the Australian Competition and Consumer Commission (ACCC) against Google in October 2019, alleging misconduct around consumer location data use. Specifically, the consumer watchdog alleged that from at least January 2017, Google had been breaching Australian Consumer law by misleading consumers about the location data it collected and used when Google Account settings were enabled or disabled via Android mobile phones and tablets.

Two Google Account settings were highlighted: ‘Location history’ and ‘Web & App activity’. The ACCC alleged when consumers set up a Google Account on their devices, they incorrectly believed, based on Google conduct, that ‘location history’ was the only account setting affecting whether the digital company collected, kept or used data about their location. In fact, Google did not inform consumers accessing their Google Account settings via Android devices that by leaving ‘Web & app activity’ switched on – a default setting – Google would continue collecting their location data.

Having previously found Google and Google Australia (together, Google) guilty of breaching Australian Consumer Law due to these location data settings in April 2021, the Federal Court has now ordered Google to pay $60 million in penalties for making misleading representations to consumers on Android phones between January 2017 and December 2018.

“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,” ACCC chair, Gina Cass-Gottlieb, said. “Google, one of the world’s largest companies, was able to keep the location data collected through the ‘Web & App Activity’ setting and that retained data could be used by Google to target ads to some consumers, even if those consumers had the ‘Location History’ setting turned off.

“Personal location data is sensitive and important to some consumers, and some of the users who saw the representations may have made different choices about the collection, storage and use of their location data if the misleading representations had not been made by Google.”

According to ACCC estimates, as many as 1.3 million Google accounts in Australia may have viewed a screen found by the court to have breached the Australian Consumer Law. The agency reported Google took remedial steps and had addressed all contravening conduct by 20 December 2018.

“Companies need to be transparent about the types of data that they are collecting and how the data is collected and may be used, so that consumers can make informed decisions about who they share that data with,” Cass-Gottlieb continued.

The findings and penalty represent the first public enforcement outcome arising out of the ACCC’s Digital Platforms Inquiry, tabled in 2019, and which urgently called for holistic and dynamic reforms to counter the adverse effect digital giants are having on Australia’s economy, media landscape, competition and society.  

Outside of the $60m fine, no separate penalty against Google Australia was issued by the court. The Court has however also made orders requiring Google to ensure its policies include a commitment to compliance and to train certain staff about Australian Consumer Law, as well as to pay a 50 per cent contribution to the ACCC’s costs.

Until September 2018, the maximum penalty for breaches of Australian Consumer Law was $1.1 million per breach. The maximum penalty today is the higher of $10 million, three times the value of any benefit obtained or, if the value cannot be determined, 10 per cent of turnover. The ACCC noted the majority of Google’s conduct occurred before the maximum penalty was increased.

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