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The ACCC gets serious: First proceedings against Google following Digital Platforms Inquiry

30 October 2019

#Technology, Media & Telecommunications

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The ACCC gets serious: First proceedings against Google following Digital Platforms Inquiry

The final report from the Australian Competition and Consumer Commission’s (ACCC) Digital Platforms Inquiry noted that the ACCC was investigating the conduct of Google and Facebook in relation to a number of potential breaches of the Competition and Consumer Act 2010 (Cth) (CCA), including the Australian Consumer Law (ACL). The ACCC commenced the first proceedings arising out of those investigations in the Federal Court on 29 October 2019.

What action is the ACCC taking against Google?

One of the investigations mentioned in the ACCC’s final report was whether representations made by Google to some users about the control they have over Google’s collection of location data raise issues under the ACL. The action commenced by the ACCC on 29 October relates to this investigation. 

Specifically, the ACCC has alleged that Google, in providing information to users of Android devices in relation to location tracking during the period from at least January 2017 to late 2018, misled those users. The ACCC’s claim alleges that, during that period, Google did not advise such users that in order to stop Google collecting, retaining and using location data from their device, the user would need to switch both “Location History” and “Web & App Activity” off within a user’s Google Account. The ACCC alleges that, based on Google’s misleading conduct during the relevant period, users of Android devices would have believed that it was only necessary to switch off the “Location History” setting in order to stop Google collecting, retaining and using location data from the device.

Additional allegations by the ACCC include:

  • during the period mid to late 2018, Google engaged in misleading and deceptive conduct by telling consumers that the only way in which they could stop Google from collecting, retaining and using their location data was to stop using Google services such as Google Search and Google Maps.  However during that period consumers could stop Google from doing this by switching both “Location History” and “Web & App Activity” off
  • during the period from March 2017, certain Google’s onscreen statements explained how location data would be (and are) used were misleading. This was because Google stated that location data would only be collected, retained and used by Google for the purposes of the relevant consumer’s use of Google services. However, in reality, location data is in fact used for other purposes.

What are the potential remedies?

The ACCC has stated that it is seeking penalties, declarations and orders requiring the publication of corrective notices as well as the establishment of a compliance program. 

ACCC Chair, Rod Sims, commented that the ACCC is looking for significant penalties. Although some of the actions occurred before the penalties under the ACL increased late last year, for certain actions the ACCC may seek fines of up to $10 million or 10 per cent of annual turnover from Google. 

In addition, the ACCC has said that the proceedings will be important in increasing consumer awareness of how Google uses their personal information.

What are the implications of this action?

There is no doubt that these proceedings are a global first. No other regulator internationally has sought to bring this type of proceedings. 

Google has said that it will defend the action. This is not unexpected, particularly as many commentators consider this action to be the first step that the ACCC has taken in its fight against Google’s dominance in the ad tech services sector. Location data is a critical data set that is used for targeted advertising. Google’s ability to collect vast quantities of location data from users of Android devices (and other mobile devices) has helped Google to generate significant revenues from its ad tech services – in 2018 Google’s annual revenues were approximately US$136 billion (or just under A$200 billion), much of which is generated from advertising.

In the final report, the ACCC recommended to the Australian Government that the ACCC should undertake an inquiry into competition for the supply of ad tech services and the supply of online advertising services by advertising and media agencies. There seems little doubt that these proceedings link to that proposed inquiry.

Want to learn more?

The first directions hearing for this case is on 14 November 2019. On 15 November 2019, ACCC Chair Rod Sims, the Australian Information Commissioner and Privacy Commissioner Angelene Falk and others will be speaking on the Digital Platforms Inquiry and more at the Law Council of Australia’s Media and Communications Seminar.

Click here to register and read more about the seminar. 

Author: Angela Flannery

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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