Google is facing a hefty $425.7 million penalty after a federal jury found the company guilty of violating user privacy through improper smartphone snooping. The verdict, delivered in San Francisco, concludes a class-action lawsuit that has been ongoing since July 2020. The lawsuit accused Google of collecting user data even when tracking features were turned off, impacting an estimated 98 million users in the United States between July 1, 2016, and September 23, 2024.

The core of the issue revolves around Google's data collection practices, particularly its handling of user data when privacy controls are enabled. Plaintiffs in the case argued that Google continued to gather browsing information in the background, despite users opting out of data collection. This data was then allegedly used to enhance ad targeting, generating billions in additional revenue for the tech giant. The lawsuit specifically claimed that Google unlawfully accessed user devices and data, including app activity data, violating privacy assurances under its "Web & App Activity" setting. This occurred even after users had disabled the tracking feature. Apps like Uber, Venmo, and Instagram were mentioned in the lawsuit for using Google analytics services.

Google has denied any wrongdoing, claiming that the jury misunderstood how its products function. According to Google spokesperson Jose Castaneda, the company respects user choices when personalization is turned off and plans to appeal the verdict. During the trial, Google argued that the collected data was "nonpersonal, pseudonymous, and stored in segregated, secured, and encrypted locations" and was not associated with individual user identities or Google accounts. The company insists that its privacy tools provide users with control over their data.

Despite Google's defense, the jury found the company liable for two out of three claims of privacy violations. However, the jury did not find that Google acted with malice, meaning punitive damages were not awarded. While the plaintiffs initially sought over $31 billion in damages, the final award was significantly lower, working out to roughly $4 per device.

Even with the lower amount, the legal team representing the users hailed the outcome as a victory for privacy protection. Attorney John Yanchunis of Morgan & Morgan stated that the verdict sends a message to the tech industry that Americans will not idly stand by as their information is collected and monetized against their will. David Boies, another lawyer for the users, expressed his satisfaction with the jury's verdict.

This is not the first time Google has faced legal challenges over its data collection practices. Earlier this year, the company agreed to a nearly $1.4 billion settlement with Texas over similar privacy law violations. In 2024, Google also agreed to destroy billions of data records related to users' private browsing activities to settle a lawsuit accusing it of tracking people who believed they were browsing privately, including in "Incognito" mode.

The verdict comes at a sensitive time for Google, as the company recently avoided being broken up in a landmark antitrust case. While Google avoided a corporate split, this privacy ruling could cause reputational damage.