Google under multistate investigation for privacy practices; Texas sees possibility of litigation

Google is facing a multistate investigation into whether its privacy practices violate state consumer protection law, and Texas authorities believe litigation is "realistically contemplated" in the matter, MLex has learned.

The Office of the Attorney General of Texas said the multistate probe involves potential violations of a Texas consumer protection law that prohibits “false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.”

The previously undisclosed probe is distinct from an antitrust investigation that's being carried out by 48 states and has been spearheaded by Texas Attorney General Ken Paxton.

The Texas attorney general's Consumer Protection Division "is involved in a multistate investigation into Google for potential violations of the Texas Deceptive Trade Practices Act,” Assistant Attorney General Lauren Downey said in a letter disclosed to MLex.

Downey's letter, which is addressed to the state attorney general's Open Records Division, was dated today and came in response to a request for information from MLex.

In the letter, Downey contends the state was exempt from providing some of the requested information under the state's Public Information Act because the Consumer Protection Division "initiated this investigation for enforcement purposes. If violations are uncovered, CPD will initiate enforcement proceedings. Accordingly, the [Office of the Attorney General] anticipates litigation in this matter.”

Downey discussed the legal requirements for showing that litigation is anticipated.

"To demonstrate that litigation is reasonably anticipated, a governmental body must furnish evidence that litigation is realistically contemplated and is more than mere conjecture."

The probe, MLex has learned, revolves around Google’s privacy settings for products such as “Incognito Mode” in its Chrome browser.  On that setting, Google says Chrome won't save a user's browsing history, cookies, website data and information entered in online forms.

The Texas law carries civil penalties of $5,000 to $15,000 for each violation, which — if multiplied by the number of Chrome-using Android smartphones in Texas, a state with a population of about 29 million people —represents a theoretical liability to Google in the billions of dollars. Texas didn't name other states involved in the investigation.

Google is already facing private class-action litigation over the privacy of Incognito Mode, with a lawsuit filed in US District Court in San Jose, California, in June claiming the search and advertising giant violates federal and state laws by deceptively continuing to track users’ online activity in private modes despite assuring them the activity is private. Google has denied those allegations.

A spokesman for Paxton didn't immediately respond to a request for information about other states in the probe and when the probe was launched. Spokesmen for attorneys general of other states, including California and Colorado, declined today to confirm or deny they are part of the probe.

"To protect its integrity, we are unable to comment on a potential or ongoing investigation," a spokesperson for California Attorney General Xavier Becerra told MLex.

Arizona Attorney General Mark Brnovich sued Google in May, alleging the company violated the Arizona Consumer Fraud Act, a law similar to the Texas law at issue, over the collection of geolocation data by Android smartphones even after users switched “location history” settings off on their phones.

A Google spokesperson today referred MLex to the company’s statement following the filing of the Arizona lawsuit, which the company said mischaracterized its services. “We have always built privacy features into our products and provided robust controls for location data. We look forward to setting the record straight,” said the spokesperson, Jose Castaneda.

Texas’ disclosure of the separate multistate consumer protection probe comes one year to the day after Paxton and other state attorneys general stood on the steps of the US Supreme Court to announce that 48 states were joining forces to investigate Google for antitrust violations. The attorneys’ general antitrust probe has deepened in recent months, with Google being hit with a hyper-detailed list of 252 questions from the Texas Attorney General’s Office this summer seeking a wide swath of information about its advertising-technology business.

A Senate Judiciary antitrust subcommittee will probe Google’s online ad practices at a hearing next week. The US Department of Justice is also believed to be close to filing an antitrust complaint against Google.

The previously unreported Texas consumer protection probe, which is being run by a different arm of the Office of the Attorney General than the antitrust division, appears to be in a relatively early phase. The AG’s office said Google, for example, has not yet seen the evidence collected by investigators that was sought by MLex in its public information request.

Information sought by MLex "relates directly to the anticipated litigation, and has not been provided to the potential opposing party. Accordingly, the [Office of the Attorney General] asserts the representative sample of information [sought by MLex] may be withheld from required public disclosure" under Texas law, the letter said.

MLex last month asked the Texas attorney general to provide copies of any correspondence between it and other state attorneys general providing details about any consumer protection or privacy probe of Google, including information provided by specific companies complaining about Google’s conduct.

Texas open-records law, Downey said in the letter, exempts the attorney general from disclosure if it can assert that "litigation is pending or reasonably anticipated, and ... that information at issue is related to that litigation."

Texas is also in the early stages of probing Facebook’s use of facial-recognition technology to “tag” the identity of people in photos uploaded to the social network, as part of a separate consumer protection probe.

—With assistance by Dave Perera in Washington, DC.