Google settles $5 billion privacy lawsuit ahead of cookie phase-out

Google has agreed to settle a $5 billion consumer privacy lawsuit penalizing the company for alleged intrusive tracking policies.

The class action lawsuit claimed Google’s systems allowed the company to track user activity even while they were using private browsing mode on Chrome.

The lawsuit, Brown et al v Google LLC et al, was initially filed in 2020 and sought a minimum of $5,000 in damages per user for violating federal wire-tapping and California’s privacy laws.

Google tried to have the case dismissed in August 2023, claiming users were adequately informed of the data collection taking place when browsing the web, but this bid was rejected.

“Incognito mode in Chrome gives you the choice to browse the internet without your activity being saved to your browser or device”, Google spokesperson Jose Castaneda told Reuters. 

“As we clearly state each time you open a new incognito tab, websites might be able to collect information about your browsing activity during your session."

The terms of the settlement were not disclosed, with the formal settlement expected to be submitted for court approval by 24 February 2024.

The end of an era for cookies but not tracking

Google recently announced its plans to begin the roll-out of its alternative web tracking system in October 2023, whereby the company will remove full-scale support for third-party cookies in Chrome starting in Q3 2024.  

Google will replace cookies with its Topics API system. This system will create browser profiles for users based on their session activity, which websites will be able to view to inform their advertising campaigns, without revealing information specific to the user.

The user profiles will reflect areas or topics they are interested in, but Google says websites will only be served these areas of interest and not additional information about the user or their browsing activity.

This shift would put an end to websites using cookies to follow visitors as they surf the web, but will continue to involve Google recording user activity in order to generate consumer profiles for advertisers.

Speaking to ITPro on the consequences of the transition to  cookieless web browsing, chief experience officer at GOA Marketing Luke Boudour noted Google’s solution will try to minimize the impact on its primary revenue source.

“The key thing for me is that Google has been discussing and working on solutions to remove cookies for a number of years now, and therefore we can be sure that its solution is one that will impact its ad business the least; it's what pays for everything after all.”

“There will likely be some improvement to user privacy for those that opt out of cookies by giving advertisers less to target you with, but I don't expect this will overall impact digital marketing efforts. Swathes of advertisers are already utilizing first party data more and more in preparation for moves like this, so whilst there will be some disruption I don't anticipate it will cause as many headaches as Apple ITP did for example."