In April 2021, the Federal Court handed down a decision in favour of the Australian Competition and Consumer Commission (ACCC) against Google LLC. The ACCC had brought misleading and deceptive conduct claims against Google for its failure to disclose clearly to Android users which Google Account settings allowed it to collect and use customers’ personal location data.

Two main takeaways about expert evidence emerge from Justice Thawley’s judgement, which explicitly accepted expert opinions as instrumental in deciding the matter:

1. There is a strong possibility that Australian courts will place even greater reliance on expert evidence for interpreting disclosures about the collection and use of personal data. Behavioural Economics has been accepted by the Federal Court in this particular case as the appropriate framework with which to analyse the extent of information disclosure and whether the disclosure, or lack thereof, was misleading. It reinforces the use of the same kind of evidence on which the Federal Court relied in ACCC v Trivago N.V. [2020] FCA 16.
2. A clearer test for how a “reasonable” user of a digital interface makes decisions may emerge over time. Although this matter relied on a “common-sense” approach backed by assumptions about the irrationality of human behaviour in Behavioural Economics, the exact nature of user biases (e.g. loss aversion, present bias, status quo bias) and how they affect users on specific platforms may become more concrete as the number of personal data and privacy matters grows.

Background

The ACCC claimed that from January 2017 to December 2018, Google had misrepresented to users that turning off ‘Location History’ would totally remove Google’s capacity to collect and use the device’s location data when, in fact, leaving the ‘Web & App Activity’ option on whilst turning ‘Location History’ off would have the same effect.

The ACCC referenced three scenarios in which it believed Google had misled users in this manner.

Scenario 1 related to users who, when setting up their Google accounts, chose to click ‘More Options’ rather than ‘I agree’ or ‘Don’t create the account’. The ‘More Options’ link was located at the bottom of a screen displaying Google’s ‘Privacy and Terms’ policy. Those who selected ‘More Options’ were shown a list of default settings which the user could change, each of which included a ‘Learn More’ button. ‘Location History’ and ‘Web & App Activity’ toggles were among these settings. [151]-[157].

The ACCC emphasised that Google provided little indication that “Web & App Activity’ would allow Google to track and store the user’s location data. [165] Even where clicking ‘Learn More’ under ‘Web & App Activity’ would have explained this fact, neither the heading ‘Web & App Activity’, nor the setting’s abbreviated description disclosed with sufficient transparency that this particular setting would track location data when on regardless of the ‘Location History’ setting. This omission was especially misleading where ‘Location History’ appeared as the designated setting for location data tracking. [164]

Scenario 2 addressed users who agreed to the default settings before turning off Location History. The parties produced several variants of text in a pop-up screen that appeared when ‘Location History’ was toggled to ‘off’. Google’s failure to specify in two variants that it could still track location data with this setting off amounted to misleading and deceptive conduct.

Scenario 3 related to users who considered turning Web & App Activity ‘off’. Whilst the pages relevant for adjusting the ‘Web & App’ Activity referred to ‘Activity’ and ‘Search Activity’ on ‘Apps and in Browsers’, and ‘Google sites’, they did not explicitly refer to location data.

Google’s overarching argument was that users concerned about privacy would have taken the time to inspect Google’s ‘Privacy and Terms’ page, along with the ‘Learn More’ screen for ‘Web & App Activity’ which, when read as a whole, accurately communicated that Google could still collect location data whilst ‘Location History’ was ‘off’.

Decision and Expert Evidence

The court focused on the impact of the lack of clear disclosure in each scenario to determine that Google had contravened s 18 of the Competition and Consumer Act 2010 (Cth). Justice Thawley agreed with the Plaintiffs that in all three scenarios users could reasonably have thought that Google would no longer be obtaining, retaining or using location data once ‘Location History’ was turned off. Overall, Google’s settings interface could conceivably lead a reasonable user to conclude incorrectly that ‘Location History’ was the sole mechanism for allowing Google to collect and use user data [219]-[228]

In reaching this conclusion, the Court relied heavily on the “common-sense” approach to considering users’ decision-making promoted by the parties’ behavioural economics expert witnesses.

The ACCC’s expert Professor Robert Slonim of the School of Economics at the University of Sydney and Google’s Professor John List of the School of Economics at the University of Chicago prepared individual expert reports before composing a joint report. Their evidence assisted the court in firstly categorising the class of people the ACCC were acting for against Google, namely ‘atypical’ people who would take longer to explore the Google policy and interface because of various concerns, including concerns about their privacy.

Secondly and most significantly, expert evidence assisted the Court in lowering the standard of rationality it was required to attribute to the relevant class of ‘atypical’ users. Justice Thawley accepted the basic assumption in behavioural economics that “actual human behaviour deviates from the traditional rational model in predictable ways.” [52] His Honour was therefore able to conclude that Google’s design of settings interfaces amounted to misleading and deceptive conduct in relation to users who could be considered ‘reasonable’ but nonetheless displayed the biased thinking implicit in the behavioural economists’ models of choice theory.

The Court, in other words, did not require the ‘atypical’ user to possess the higher degree of meticulousness implicit in Google’s description of the user who would have both the rationality to read all screens associated with Privacy and ‘Web & App Activity’, and also the intelligence to arrive at the correct conclusions. In the framework of behavioural economics, “even [users] with heightened privacy concerns would not re-read screens with the kind of careful attention that has been necessary in considering the various arguments put by the parties.” [202] It was sufficient that the overall presentation of the ‘Location History’ setting and the omission of clear location data disclosures could have misled a user who had genuine concerns about their privacy but did not possess the rationality to inspect Google’s privacy policies (including the ‘Privacy and Terms’ page) in more detail.