Consumer data collection and misleading and deceptive conduct: A dive into ACCC v Google

In recent proceedings brought by the Australian Competition and Consumer Commission (ACCC) against Google, the Federal Court of Australia found that Google’s conduct relating to the collection and use of personal location data may not have misled all reasonable users in the class but would have misled some reasonable users.

This prosecution coupled with other recent proceedings brought by the ACCC highlight a movement of responsibility for enforcing privacy and data laws and standards from traditional privacy law mechanisms to consumer law regulators.

The decision serves as a timely reminder for businesses to focus on the “overall impression”  given to consumers particularly when information is presented in a “layered” way.

The case

The ACCC brought proceedings against Google in October 2019 alleging that Google misled consumers about the collection and use of location data.  Two settings were central to the ACCC’s case – “Web & App Activity” and “Location History”.  When setting up a device, Web & App Activity was defaulted to “on” and Location History was defaulted to “off”.  The ACCC alleged that there were users who, acting reasonably, would have been led into thinking that Location History “off” meant that Google would not obtain, retain and use personal data about a user’s location when, in reality, location data was still being collected unless the user also turned off the “Web and App Activity” setting.  These settings could be changed at any time in the settings menu.

The ACCC ran its case by reference to particular classes of users in three different scenarios.  Scenario one users were setting up their Google Account and had concerns about privacy.  Scenario two users made a decision to turn their Location History “off”.  Scenario three users considered turning off Web & App Activity and had checked what the Web & App Activity setting said about location data.

The ACCC alleged that the presentation of these settings suggested that turning the “Location History” to “off” would stop Google from collecting the user’s location information and using it for the user’s and Google’s purposes.  The ACCC claimed that this constituted misleading conduct, therefore breaching ss 18, 29(1)(g) and 34 of the Australian Consumer Law.  In response, Google submitted that when considering all of the screens and information provided by Google, the user would have understood what each setting meant and how they could turn “off” having their location data collected and used.  Google submitted that they had provided all of the relevant information to the users through various screens and “Learn More” hyperlinks.

Overall, the Court concluded that the ACCC’s case was partially made out in respect of each of the three scenarios.  Google’s conduct would not have misled all reasonable users in the classes identified, but Google’s conduct misled or was likely to mislead some reasonable users within the particular classes identified.  The Court found that most users would not have read everything in the careful and meticulous manner submitted by google.  The fact that the information was available to consumers does not remedy the misleading conduct but may be relevant to penalties.

Our view

The Federal Court of Australia judgment is a significant decision for businesses that collect or use consumer data.  The decision:

  • Demonstrates the ACCC shifting its focus to consumer privacy and data collection.  The Commerce Commission may follow.  This is significant because penalties under the Fair Trading Act 1986 are far greater than penalties under the Privacy Act 2020.
  • Sets a high bar for ensuring that consumers are not misled where “layered” information is presented to consumers (through the use of landing pages and additional hyperlinks or click-through screens).
  • May have a broader impact on the way New Zealand court’s chose to assess whether conduct is likely to mislead or deceive a particular class of consumers by reference to the reasonable members of that class.  On the Federal Court’s approach businesses may breach consumer law even if they mislead only a small proportion of reasonable users.

While striking the balance between customer experience and compliance is extremely difficult, the decision highlights for New Zealand businesses the importance of:

  • ensuring that all consumer information is clear, concise and upfront;
  • focusing on the “overall impression” given by the information provided; and
  • remembering that what you don’t tell consumers is just as important as what you do.

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