AG Brnovich gets OK from judge to haul Google into court

Google will have to go to court to defend against charges that it secretly invades the privacy of Arizona consumers.

In a 21-page ruling made public this week, Maricopa County Superior Court Judge Timothy Thomason rejected claims by the internet giant that its admitted practices of tracking and collecting information on users is legal. He said that Attorney General Mark Brnovich presented enough information to show the likelihood that the company’s conduct violates the Arizona Consumer Protection Act.

Thomason’s conclusions do not guarantee the state will win its case. But it essentially clears the way for Brnovich and the outside attorneys his office has hired to take the case to a jury.

The Arizona case is is separate from lawsuits that various states filed earlier this week alleging deceptive location tracking practices. Those are based on more general claims of privacy.

By contrast, Brnovich is specifically depending on Arizona’s own consumer protection laws. And Thomson said there is sufficient evidence at this point to suggest that what Google is doing appears to violate them.

There was no immediate response from Google.

Central to the lawsuit is the contention that the company not only collects and stores location data but deliberately makes it difficult for those who use Android phones that operate on the Google-created operating system to know what information is being sent. Brnovich also argues that the company does not make it simple for people to turn off tracking and hides the fact that even if customers turn off location history that data is still transmitted.

But more than Android-powered phones are at issue.

Google also collects, stores and uses location data whenever people interact with Google apps and services. Brnovich contends consumers are not told they cannot prevent the collection of location information, even if they disable certain settings.

What that’s all about is the admitted ability and business practice of Google to sell that information to advertisers to target users in specific locations. That information, Brnovich said when he filed suit in 2020, generated $135 billion for Google in 2019, including “hundreds of millions of dollars from ads presented to millions of users in the state of Arizona.”

Despite acknowledging many of the practices, attorneys for Google said none of that violates Arizona laws designed to protect consumers.

The heart of those statutes makes it illegal to engage in deceptive and unfair practices “in connection with” the sale or advertisement of any merchandise.
The theory presented by attorneys for Google is that any fraud that may have occurred — and they are not conceding any did — was not part of the process of consumers obtaining Google products but only occurred later, after the sale was made, when they set up accounts or used an app. In fact, they said users are not even required to set up an account, meaning there is no connection between the sale and the alleged deception.

“There is some appeal to Google’s argument,” Thomason wrote. He said the consumer fraud act is intended primarily to address situations where people are mislead while buying or leasing merchandise.

“Statements or omissions that occur after the sale or lease arguably have no impact on the consumer’s purchasing decision,” the judge said.

But Thomason said there is enough in the state’s argument to suggest the actions of Google fall within what’s prohibited by the law.

It starts with the fact that Google devices, like Pixel and Nexus phones, come pre-loaded with functions, including sensors and settings within them, which Google then uses to track consumers’ locations. And the state argues that during the “bargaining process,” when people were buying the devices, they weren’t told about the tracking.

“The state claims that Google acted deceptively in not explaining to consumers how tracking functions worked, leading consumers to incorrectly believe that they could control when they could be tracked,” the judge said.

But even those who do not buy Google phones are affected when people use Google services, like Google Maps, where people get a service like directions in exchange for giving the company their personal location data.

What’s wrong with this, the state says, is that customers are misled into believing that the company will only collect data in certain ways and, potentially more significant, that users have control over what information is collected.

Google said none of that violates Arizona law because it provides the apps free of charge. Thomason, however, said there are two flaws to that argument.
The first, he said, is nothing in the Consumer Fraud Act actually requires that there be a payment. Then there’s the state’s claim that the services really aren’t “free.”

“They were ‘sold’ to users, despite ostensibly being ‘free,’ because there was an exchange of consideration in the form of data collection from users,” Thomason said. “Providing location data, in exchange for use of apps or other services, can certainly be considered valuable consideration under the act.”

And the judge said that what consumers are providing clearly has economic worth.

“Location information is clearly valuable to Google’s business model, as Google uses the information to make targeted ad placements, for which advertisers pay a premium,” Thomason wrote. And he specifically rejected the company’s efforts to compare its apps and services to free newspapers and TV and radio stations that provide services to consumers without cost.

“Free newspapers and broadcast radio are financed through untargeted advertising,” he said. “Newspapers and broadcast radio do not condition their services on receiving something ‘back’ from the consumers,” the judge continued. “In contrast, Google allegedly takes user location information in exchange for the use of its apps and services and uses that same information to direct advertising targeted toward specific consumers.”

In a separate ruling, Thomason rebuffed a bid by Google to have him — and not a jury — hear the case.

The judge noted that the legislature approved a measure just last year requiring a jury trial in any civil action brought by the state alleging an illegal practice.

Thomason also dismissed arguments by Google that provision was “slipped into” another bill at the last minute and that Brnovich’s office “orchestrated” the approval of this law to avoid bench trials in this and similar cases and made false statements to legislators as passing off the provision as a mere clarification of existing law. The judge said that’s legally irrelevant here.

“There is no legal basis for the court refusing to apply a statute because it was allegedly passed in an unfair or dishonest manner,” he said. Nor, he said, can judges be dragged into debates about whether there were “misstatements” about the bill.

“Indeed, it is highly likely that misstatements are regularly made about proposed laws in Washington and a state capitols across the country,” Thomason said. “The court is in no position to look ‘behind’ duly passed statutes and make sure they were passed in a ‘fair’ manner and that no misstatements were made to legislators by proponents of the bill.”

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