Google Agrees to Settle $5 Bn Lawsuit over ‘Incognito’ Mode

This illustration photograph taken on December 22, 2023 shows the logo of US multinational technology and Internet-related services company Google displayed on a smartphone's screen, in Frankfurt-am-Main, western Germany. (AFP)
This illustration photograph taken on December 22, 2023 shows the logo of US multinational technology and Internet-related services company Google displayed on a smartphone's screen, in Frankfurt-am-Main, western Germany. (AFP)
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Google Agrees to Settle $5 Bn Lawsuit over ‘Incognito’ Mode

This illustration photograph taken on December 22, 2023 shows the logo of US multinational technology and Internet-related services company Google displayed on a smartphone's screen, in Frankfurt-am-Main, western Germany. (AFP)
This illustration photograph taken on December 22, 2023 shows the logo of US multinational technology and Internet-related services company Google displayed on a smartphone's screen, in Frankfurt-am-Main, western Germany. (AFP)

Google has agreed to settle a consumer privacy lawsuit seeking at least $5 billion in damages over allegations it tracked the data of users who thought they were browsing the internet privately.

The object of the lawsuit was the "incognito" mode on Google's Chrome browser that the plaintiffs said gave users a false sense that what they were surfing online was not being tracked by the Silicon Valley tech firm.

But internal Google emails brought forward in the lawsuit demonstrated that users using incognito mode were being followed by the search and advertising behemoth for measuring web traffic and selling ads.

In a court filing, the judge confirmed that lawyers for Google reached a preliminary agreement to settle the class action lawsuit -- originally filed in 2020 -- which claimed that "millions of individuals" had likely been affected.

Lawyers for the plaintiffs were seeking at least $5,000 for each user it said had been tracked by the firm's Google Analytics or Ad Manager services even when in the private browsing mode and not logged into their Google account.

This would have amounted to at least $5 billion, though the settlement amount will likely not reach that figure, and no amount was given for the preliminary settlement between the parties.

Google and lawyers for the consumers did not respond to an AFP request for comment.

The settlement came just weeks after Google was refused a request that the case be decided by a judge. A jury trial was set to begin next year.

The lawsuit, filed in a California court, claimed Google's practices had infringed on users' privacy by "intentionally" deceiving them with the incognito option.

The original complaint alleged that Google and its employees had been given the "power to learn intimate details about individuals' lives, interests, and internet usage."

"Google has made itself an unaccountable trove of information so detailed and expansive that George Orwell could never have dreamed it," it added.

A formal settlement is expected for court approval by February 24, 2024.

Class action lawsuits have become the main venue to challenge big tech companies on data privacy matters in the United States, which lacks a comprehensive law on the handling of personal data.

In August, Google paid $23 million to settle a long-running case over giving third-parties access to user search data.

In 2022, Facebook parent company Meta settled a similar case, agreeing to pay $725 million over the handling of user data.



Google-parent Alphabet Earnings Shine with Help of AI

Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
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Google-parent Alphabet Earnings Shine with Help of AI

Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP

Google-parent Alphabet on Wednesday reported quarterly profits that topped expectations, saying artificial intelligence has boosted every part of its business.

Alphabet's second-quarter profit of $28.2 billion -- on $96.4 billion in revenue -- came with word that the tech giant will spend $10 billion more than it previously planned this year on capital expenditures, as it invests to meet growing demand for cloud services.

"We had a standout quarter, with robust growth across the company," said Alphabet chief executive Sundar Pichai.

"AI is positively impacting every part of the business, driving strong momentum."

Revenue from search grew double digits in the quarter, with features such as AI Overviews and the recently launched AI mode "performing well," according to Pichai.

Ad revenue at YouTube continues to grow along with the video platform's subscription services, Alphabet reported.

Alphabet's cloud computing business is on pace to bring in $50 billion over the course of the year, according to the company.

"With this strong and growing demand for our cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately $85 billion and are excited by the opportunity ahead," Pichai said.

Alphabet shares were up nearly 2 percent in after-market trades that followed the release of the earnings figures.

Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence and whether AI-generated summaries of search results will translate into fewer opportunities to serve up money-making ads.

The internet giant is dabbling with ads in its new AI Mode for online search, a strategic move to fend off competition from ChatGPT while adapting its advertising business for an AI age.

The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages.

However, advertising remains Google's financial bedrock.

"Google is doing well despite tariff headwinds and rising AI competition in search," said eMarketer principal analyst Yory Wurmser.

"It's also successfully monetizing AI Overviews and AI Mode, a good sign for the future."

Google and rivals are spending billions of dollars on data centers and more for AI, while the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent.

Antitrust battles

Meanwhile the online ad business that generates the cash Google invests in its future could be neutered due to a defeat in a US antitrust case.

During the summer of 2024, Google was found guilty of illegal practices to establish and maintain its monopoly in online search by a federal judge in Washington.

The Justice Department is now demanding remedies that could transform the digital landscape: Google's divestiture from its Chrome browser and a ban on entering exclusivity agreements with smartphone manufacturers to install the search engine by default.

District Judge Amit Mehta is considering "remedies" in a decision expected in the coming days or weeks.

In another legal battle, a different US judge ruled this year that Google wielded monopoly power in the online ad technology market, another legal blow that could rattle the tech giant's revenue engine.

District Court Judge Leonie Brinkema ruled that Google built an illegal monopoly over ad software and tools used by publishers.

Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed.

Google said it is appealing both rulings.