Google Privacy Lawsuit Could Quickly Hurt Retailers

Written by Evan Schuman
January 28th, 2013

In a move that should send a frightening jolt to retailers, a group of iPhone users in London announced on Monday (Jan. 28) it is in the process of suing Google for online tracking that goes beyond the expectations of those users. On the surface, such legal action against Google falls under the heading of “Join the club.” But there’s actually more danger here than that.

The essence of the London case is that Google and Apple made privacy promises that are being broken. That fact may make it more of a contract law and a deceptive trade practices claim than a criminal case. And even that is dicey, because the news release from the first plaintiff to file a lawsuit indicates it’s less a matter of Google or Apple lying than it is about the companies being vague.

“Google claims it does not collect personal data but doesn’t say who decides what information is ‘personal.’ Whether something is private or not should be up to the Internet surfer, not Google,” the news release quoted privacy advocate and litigant Judith Vidal-Hall as saying. That’s not a “You didn’t do what you said” claim. That’s a “You didn’t really say what you were promising and I agreed anyway so please pay up” claim.

But all of that is an issue for the lawyers at Google and maybe Apple. How does this make retailers’ lives miserable? Quite easily.

Even if this litigation has no chance of winning in court (with juries, anything is possible), the case will cause widespread damage long before it gets close to trial. Unless it’s dismissed immediately, because a judge concludes that the accusations aren’t even supported by what the plaintiffs file, this case will quickly move into discovery. That means Google, and possibly Apple, will be required to disclose tons of info about what it tracks. A deposition alone would be devastating.

That’s not because Google is necessarily doing anything so terrible. It’s that the information revealed will explicitly state for surfers all that goes on today. Such transparency will be as good for E-Commerce as documentaries about slaughterhouses are for sales of steaks. There are simply things that consumers would rather not know.

Really bringing it home is the inevitable next phase. What is likely to happen after Google reveals its visitor-tracking magic? How long will it be before similar legal papers are slapped on the E-Commerce and M-Commerce teams at Amazon, Walmart, Target or Walgreens?

Home Depot got a reminder this month that its industry-common practice of tracking in-store shoppers by using their online payment card can freak shoppers out.

It’s not what the companies are doing so much as how shoppers will likely react to those activities on an emotional level. What will they perceive it to be?

The power of mobile—which could easily trump E-Commerce in terms of potential exabytes of CRM and aggregated shopper data—is that it can track so very much about the purchase experience. That’s great for retail IT to know—and terrible for shoppers to see.

Some of that is because IT has training and can put such information into meaningful context. But it’s also because shoppers don’t have anywhere near the privacy they think they do—and haven’t had that privacy for many decades. There was very little reason, however, for those sophisticated research techniques at P&G to ever come to light. With M-Commerce, this type of litigation could shine a lot more light on these practices.

Just consider that when you approve the next idea from marketing. Ask marketing how they would feel about explaining this technique to shoppers when it’s splashed across front pages.


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