Benzinga - by Natan Ponieman, Benzinga Editor.
Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), the parent company of Google, must delete data collected from millions of users who utilized the “incognito” mode in Google Chrome, its web browser.
The company has agreed to delete the data in response to a 2020 lawsuit that accused it of misrepresenting the privacy of users’ data in the browser’s “private” mode.
Incognito mode is advertised as a way for users to browse the web without saving the browsing history. Yet, through the use of third-party cookies, Google had been gathering user data between 2016 and 2023 without the knowledge of users.
Chrome is the default browser on Android phones and is used by 3.45 billion people worldwide, according to Backlinko.
Google agreed to resolve the class action last December, for a total of $5 billion. New settlement details were released on Monday via a court filing from attorneys defending a group of users.
The news did not put off investors on Monday, with the company's stock rising 2.5% at the time of publication on Monday.
In an email to Benzinga, a Google spokesperson said that the company is pleased to resolve this case, "which we’ve long disputed, and will provide even more information to users about Incognito mode.”
"Incognito mode in Chrome will continue to give people the choice to browse the internet without their activity being saved to their browser or device,” the spokesperson said.
In the class action lawsuit, plaintiffs charged Google with failing to adequately disclose its data collection practices, alleging the company covertly retained users’ web browsing information even in Incognito mode.
Google's business model is largely based on the offering of free products in exchange for gathering data from users, which is used to power the company's massive ad revenue service.
As per the lawsuit, Google continued to amass detailed user data through advertising technologies and collaborations with third-party sites by using Google Analytics or Google Ad Manager, thus gaining insight into what users were doing online.
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A Google spokesperson told Seeking Alpha that the company never associated these data with users when they used the incognito mode.
"We are happy to delete old technical data that was never associated with an individual and was never used for any form of personalization," he said.
Under the settlement, Chrome will block third-party cookies on incognito mode by default moving forward. These allow sites, and even Google, to keep track of user activity even under incognito mode. This setting must be maintained at least until 2029, as per the settlement.
Google will also delete all data gathered this way before December 2023. After that date, the Chrome browser changed its disclosure statements to clarify how information is gathered during "private" browsing mode.
Users will not automatically receive money from the class action, but the settlement leaves open the option for users to pursue damages on an individual basis against Google. Last week, a block of 50 users pursued this route in California, as per the WSJ.
The company is also facing several other lawsuits in the U.S. as well as in the European Union and other territories, including lost battles on antitrust issues and a recent settlement of $1.67 billion on intellectual property for AI chips.
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