Australia's competition watchdog has launched Federal Court proceedings against Google, alleging the internet giant misled Australian consumers to obtain their consent to expand the amount of personal information about their internet activity it collected and combined.

The Australian Competition & Consumer Commission accuses Google of misleading consumers when it failed to properly inform them, and did not gain their explicit informed consent, about its move in 2016 to start combining personal information in consumers' Google accounts with information about those individuals' activities on non-Google sites that used Google technology, known as DoubleClick technology.

This meant that data about users' non-Google online activity became linked to their names and other identifying information held by Google, the ACCC said. Previously, this information had been kept separately from users' Google accounts, meaning the data was not linked to an individual user.

"We are taking this action because we consider Google misled Australian consumers about what it planned to do with large amounts of their personal information, including internet activity on websites not connected to Google," ACCC Chair Rod Sims said in a statement.

"Google significantly increased the scope of information it collected about consumers on a personally identifiable basis. This included potentially very sensitive and private information about their activities on third party websites. It then used this information to serve up highly targeted advertisements without consumers' express informed consent."

The use of this new combined information allowed Google to increase significantly the value of its advertising products and its profits, the regulator said.

"The ACCC considers that consumers effectively pay for Google's services with their data, so this change introduced by Google increased the 'price' of Google's services, without consumers' knowledge," Sims said.

Google said it strongly disagrees with the allegations and intends to defend its position.

"In June 2016, we updated our ads system and associated user controls to match the way people use Google products: across many different devices," Google said in a statement.

"The changes we made were optional and we asked users to consent via prominent and easy-to-understand notifications. If a user did not consent, their experience of our products and services remained unchanged."

However the ACCC said that from June 2016 until at least December 2018, Google account holders were prompted to click 'I agree' to a pop-up notification from Google that purported to explain how it planned to combine their data, and sought the consumers' consent for this.

"The ACCC alleges that the "I agree" notification was misleading, because consumers could not have properly understood the changes Google was making nor how their data would be used, and so did not – and could not – give informed consent," the regulator said in a statement.

DoubleClick is a supplier of ad-serving technology services to publishers and advertisers and also track users' internet activity on third-party sites that display ads using its technology.

In April, the Australian government said it would force Facebook and Google to pay media companies in the country for news content they use. The changes came after an ACCC report last year found the two companies wield too much influence over Australia's news and advertising markets, stifling competition, and deprive consumers of control over their personal information.

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