Antitrust Law Daily Wrap Up, ADVERTISING—NDCal: Android Device Users Lacked Standing to Challenge Google’s Information Collection Practices; Leave to Amend Granted , (Mar 28, 2013)

By Jody Coultas, J.D.

Android device users lacked standing to assert California Unfair Competition Law (UCL) claims against Google and its subsidiaries for allegedly failing to disclose that it allowed apps to capture personal information, according to the federal district court in San Francisco (In Re: Google Android Consumer Privacy Litigation, March 26, 2013, White, J.). The court concluded that, if the users could establish standing, they could assert UCL claims based on Google’s collection and dissemination of personal information.

Google’s Android operating system includes software “hooks,” which make personal information about the mobile device user available to an App developers. Google also acquired AdMob, a mobile advertising marketplace that offered advertisers and publishers the ability to target and personalize advertising to their customers. Mobile device users alleged that the software hooks were “spyware” that collected personally identifiable information without properly notifying users or obtaining their consent.

Article III Standing. To have standing, a plaintiff must show an injury in fact that is concrete and particularized and actual or imminent, not conjectural or hypothetical fairly traceable to the challenged action of the defendant.

The court concluded the users failed to allege an injury based on the purported decrease in value of their personal information. Even if there was a market for the information, there was no evidence that the users attempted to sell their personal information or would attempt to do so in the future. The users also failed to show what harm resulted from Google allowing the app developers to access and tracking the information.

The users had standing to assert their claims against Google that the software hooks decreased the battery life of their phones, according to the court. A decrease in the performance of an electronic device may constitute an injury. The users argued that their batteries discharged more quickly and that their services were interrupted because of Google’s actions. However, the injury was not fairly traceable to AdMob.

Because the users could not show an injury based on overpayment for the Android devices, the court concluded that the users lacked standing to assert those claims. The users did not submit evidence concerning which Android devices they purchased, how much those devices cost, or that they would not have purchased the device or would not have paid what they did for such devices. The users also failed to identify what statements were material to their decision to purchase an Android device or to download or use any given App.

UCL. The court concluded that the users lacked standing to assert the UCL claims for the same reasons they lacked Article III standing. The users failed to show that they lost money or property as a result of the Google’s conduct and failed to show that they overpaid for their devices. With respect to battery life, the users only established standing as to Google.

Even if they had standing, the users were unable to state UCL claims against Google for unlawful or fraudulent acts, according to the court. Because the users were unable to assert a claim under any other law, the unlawful prong did not apply. The claims also failed to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b).

However, the court concluded that if the users were able to sufficiently allege standing, the users would be able to state a UCL claim under the unfair prong. Unfair means any practice whose harm to the victim outweighs any benefits. Allegations regarding collection and dissemination of personal information are sufficient to state a claim under the unfair prong.

Leave to Amend. The court granted the users leave to amend their UCL claim in order to specifically identify the exact statements in Google’s Privacy Policy that were at issue and what specific information was omitted, such that any statements made were misleading. The users must also identify when and where the alleged misrepresentations were made. The case is No. 11-MD-02264 JSW.

Attorneys: Jonas Palmer (Mann Audet & Partners LLP) for Beverly Levine. David H. Kramer (Wilson Sonsini Goodrich & Rosati) for Google, Inc.

Company: Google, Inc.

Cases: Advertising ConsumerProtection Privacy StateUnfairTradePractices CaliforniaNews