Google violated Australian law by misleading users of Android mobile devices about the use of their location data, a court ruled on Friday in a landmark decision against the global digital giant.
The US company faces potential fines of “many millions” of dollars over the case, which was brought by the Australian Competition and Consumer Commission, the regulators’ chief Rod Sims said.
The federal court found that in 2017 and 2018 Google misled some users of phones and tablets featuring its Android operating system by collecting their personally identifiable location information even when they had opted out of sharing “Location History” data.
It said Google notably failed to make clear that allowing tracking of “web and app activity” under a separate setting on their devices included the location details.
Various studies around the world have documented the problem of location data being gathered through Android and iPhone devices without users’ knowledge or explicit permission.
Such data can be highly valuable to advertisers trying to pitch location-related products and services.
But Mr Sims said Friday’s court decision was “the first ruling of its type in the world in relation to these location data issues”.
“This is an important victory for consumers, especially anyone concerned about their privacy online, as the court’s decision sends a strong message to Google and others that big businesses must not mislead their customers,” he said.
“Today’s decision is an important step to make sure digital platforms are upfront with consumers about what is happening with their data and what they can do to protect it.”
In his ruling, federal court judge Thomas Thawley “partially” accepted the ACCC case against Google, noting that the company’s “conduct would not have misled all reasonable users” of its service.
This is an important victory for consumers, especially anyone concerned about their privacy online, as the court's decision sends a strong message to Google and others that big businesses must not mislead their customers
But he added that Google’s action “misled or was likely to mislead some reasonable users” and that “the number or proportion of reasonable users who were misled, or were likely to have been misled, does not matter” in establishing contraventions of the law.
The ACCC said it would seek “pecuniary penalties” that could amount to US$850,000 per breach, potentially totalling “many millions” of dollars, national broadcaster ABC quoted Mr Sims as saying.
Google protested the ruling, which it noted had rejected some of the ACCC’s “broad claims” against it and concerned only a narrowly defined class of users.
“We disagree with the remaining findings and are currently reviewing our options, including a possible appeal,” a spokesperson said.
“We provide robust controls for location data and are always looking to do more. For example. we recently introduced auto delete options for Location History, making it even easier to control your data,” they said.
Last year, Google was targeted alongside Facebook by the ACCC for failing to compensate Australian news organisations for content posted to their platforms.
The dispute led to landmark legislation requiring digital firms to pay for news and resulted in Google and Facebook signing deals worth millions of dollars to Australian media companies.
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
