Australian regulator sues Google for allegedly using consumer data for ads without clear consent

The Australian Competition and Consumer Commission (ACCC) has launched Federal Court proceedings against Google. ACCC alleged that Google misled Australian consumers to obtain their consent to expand the scope of personal information that Google could collect and combine about consumers’ internet activity, for use by Google, including for targeted advertising.

The ACCC said that “Google misled consumers when it failed to properly inform consumers”, and did not gain their explicit informed consent about its move in 2016 to start combining personal information in consumers’ Google accounts, with information about those individuals’ activities on non-Google sites that used Google technology, formerly DoubleClick technology, to display ads. This meant this data about users’ non-Google online activity became linked to their names and other identifying information held by Google. Previously, this information had been kept separately from users’ Google accounts, meaning the data was not linked to an individual user.

Google then used this newly combined information to improve the commercial performance of its advertising businesses.

The ACCC also alleged that Google misled consumers about a related change to its privacy policy. “We are taking this action because we consider Google misled Australian consumers about what it planned to do with large amounts of their personal information, including internet activity on websites not connected to Google,” ACCC Chair Rod Sims said.

“Google significantly increased the scope of information it collected about consumers on a personally identifiable basis. This included potentially very sensitive and private information about their activities on third party websites. It then used this information to serve up highly targeted advertisements without consumers’ express informed consent,” Sims added, emphasizing that the use of this new combined information allowed Google to increase significantly the value of its advertising products, from which it generated much higher profits.

“The ACCC considers that consumers effectively pay for Google’s services with their data, so this change introduced by Google increased the ‘price’ of Google’s services, without consumers’ knowledge,” Sims said.

ACCC claimed that before June 2016, Google only collected and used personally identifiable information about Google account users’ activities on Google owned services and apps such Google Search and YouTube for advertising purposes. After June 2016, when consumers clicked on the “I agree” notification, Google began to collect and store a much wider range of personally identifiable information about the online activities of Google account holders, including their use of third-party sites and apps not owned by Google. Combined with the personal data stored in Google accounts, this provided Google with valuable information with which to sell even more targeted advertising, including through its Google Ad Manager and Google Marketing Platform brands.

The ACCC alleges that the “I agree” notification was misleading, because consumers could not have properly understood the changes Google was making nor how their data would be used, and so did not - and could not - give informed consent.

“We believe that many consumers, if given an informed choice, may have refused Google permission to combine and use such a wide array of their personal information for Google’s own financial benefit,” Sims said.

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Privacy policy change

Before 28 June 2016, Google stated in its privacy policy that it “will not combine DoubleClick cookie information with personally identifiable information unless we have your opt-in consent.”

On 28 June 2016, Google deleted this statement and inserted the following statement: “[d]epending on your account settings, your activity on other sites and apps may be associated with your personal information in order to improve Google’s services and the ads delivered by Google.”

Google’s privacy policy also states: “[w]e will not reduce your rights under this Privacy Policy without your explicit consent.”

The ACCC alleges that Google did not in fact obtain consumers’ explicit consent for this change to the privacy policy, and that Google’s statement that it would not reduce consumers’ rights without their explicit consent was therefore misleading.

“Google made a clear representation about how it would protect users’ privacy. The ACCC alleges that Google made changes without obtaining the explicit consent it had promised consumers it would obtain before altering how it protected their private information,” Mr Sims said.

In 2008, Google acquired DoubleClick, a supplier of ad-serving technology services to publishers and advertisers. Google now supplies DoubleClick’s services through its Google Ad Manager and Google Marketing Platform brands, which are the leading suppliers of ad-tech intermediary services.

These services track users’ internet activity on third-party sites that display ads through the use of DoubleClick’s advertising technology.

Google’s acquisition of DoubleClick required approval by competition authorities including the US Federal Trade Commission (FTC) and the European Commission (EC). The ACCC also reviewed and cleared this transaction.

FTC and EC cleared the acquisition, and in doing so considered submissions from Google that it would not be able to combine DoubleClick’s data on consumers’ internet activity with its own data about consumers’ activity on Google services because, at the time, DoubleClick’s contracts with its users prevented Google from doing so.

Google hasn’t had the easiest time in the Australia market. In May this year, the ACCC was seeking views from stakeholders to inform its work on developing a new draft mandatory code that will address bargaining power imbalances between Australia’s news media businesses and Google and Facebook.

A concept paper by the watchdog sets out a range of issues for which the ACCC is seeking feedback and information; including what should be included in the draft bargaining code, how particular issues should be addressed, and how the code should operate. The bargaining tools listed in the concepts paper include collective bargaining, collective boycott, collective licensing for the local media to consider. The concept paper also lists questions around the type of news to be compensated and how best to determine its value.

This came following the Australian government asking Google and Facebook to pay media outlets for news content in the country. According to several media outlets, this was part of a global effort to “rescue” local publishers by pushing tech giants to share advertising revenue. The Australian Government then had directed the ACCC to develop a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms.

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