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Alphabet’s Google (GOOGL) Losing Close to $400M in Privacy Lawsuit

Story Highlights

Google, a unit of Alphabet, has agreed to pay $391.5 million in settlement related to location tracking allegations by 40 states. The company has promised to improve location related-disclosures and user controls in 2023.

Alphabet Inc.’s (NASDAQ:GOOGL) (NASDAQ:GOOG) unit Google is required to pay $391.5 million as part of a settlement with attorney generals of 40 states, who accused the tech giant of invading the privacy of its users through improper location tracking practices.

These states have alleged that despite turning off location tracking settings, Google continues to collect information about a mobile phone’s location. The company’s privacy violations came to light when the Associated Press, in its article published in 2018, informed the public about a Web & App Activity setting that is automatically turned on whenever users set up a Google account.

This overrides users’ privacy, as the collected personal and behavioral data allows Google’s digital advertising business to show ads to users in accordance with their detailed profiles.

According to the settlement terms, Google is required to significantly improve its location tracking disclosures and user controls beginning in 2023. Also, the company will have to ensure that users are shown additional information whenever they change a location-related setting and are informed about the types of location data Google collects and its usage.

Legal privacy problems for Google do not end here. The company continues to face lawsuits by several other states over similar allegations.  

What is the Target Price for Alphabet Stock?

The average GOOGL stock price target of $129.71 implies 35.54% upside potential from the current levels. At TipRanks, Alphabet stock has a Strong Buy consensus rating based on 29 unanimous Buys. Despite analysts’ enthusiasm on the stock, GOOGL is down 34% year-to-date.

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