Shares of Alphabet (NASDAQ:GOOGL) gained over 3% on Monday as investors cheered the settlement of one of the many legal cases the company is involved in. It recently settled a class action lawsuit filed in 2020, which accused Alphabet’s Google of invading privacy by collecting data even when users were in Incognito mode, its private browsing feature.
The lawsuit also accused Google of inadequate disclosures regarding marketing practices and user privacy. Allegations were made that the company failed to adequately inform users about the data being collected, including details about the websites they visited.
Under the terms of the settlement, Google will delete data collected during Incognito browsing sessions, dating back to December 2023. Further, the company will update its disclosures to provide clearer information about data collection practices in both regular and Incognito browsing modes. Moreover, Google will adjust Incognito Mode settings to prevent third-party cookie collection for the next five years.
GOOGL’s Risk Analysis
Alphabet is no stranger to legal battles. Though the company has settled the privacy lawsuit regarding user data collection in Incognito mode, it still faces various legal challenges. These cases include antitrust concerns about its dominant market position and potential violations of advertising regulations. The ongoing legal scrutiny remains a drag on Alphabet’s performance.
The TipRanks’ Risk Analysis tool shows that GOOGL’s legal and regulatory risk exposure is higher than the industry average. Legal and regulatory risks account for 20.7% of its total risks, higher than the industry average of 18.1%.
Is Google a Buy, Sell, or Hold?
Alphabet is one of the magnificent seven stocks and has gained over 11% year-to-date. Despite the recent price appreciation, Wall Street remains bullish on Alphabet stock. With 29 Buy and eight Hold recommendations, GOOGL stock has a Strong Buy consensus rating. Analysts’ average price target of $165.37 implies an upside potential of 6.35% from current levels.
