Case5:12-cv-01382-PSG Document50 Filed03/07/13 Page1 of 74 1 GARDY & NOTIS, LLP Mark C. Gardy 2 James S. Notis (pro hac vice) Kelly A. Noto (pro hac vice) 3 Charles A. Germershausen 560 Sylvan Avenue 4 Englewood Cliffs, New Jersey 07632 Tel: 201-567-7377 5 Fax: 201-567-7337 6 GRANT & EISENHOFER P.A. James J. Sabella (pro hac vice) 7 Diane Zilka (pro hac vice) Kyle McGee (pro hac vice) 8 485 Lexington Avenue, 29th Floor New York, New York 10017 9 Tel: 646-722-8500 Fax: 646-722-8501 10 BURSOR & FISHER, P.A. 11 L. Timothy Fisher (State Bar No. 191626) Sarah N. Westcot (State Bar No. 264916) 12 1990 North California Boulevard, Suite 940 Walnut Creek, California 94596 13 Tel: 925-300-4455 Fax: 925-407-2700 14 15 Interim Lead Counsel for the Class 16 [Additional counsel listed on signature page] 17 UNITED STATES DISTRICT COURT 18 NORTHERN DISTRICT OF CALIFORNIA 19 SAN JOSE DIVISION 20 CASE NO. 12-CV-01382 PSG 21 22 CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT 23 IN RE GOOGLE, INC. PRIVACY POLICY LITIGATION 24 COMPLAINT FOR DAMAGES, EQUITABLE, AND INJUNCTIVE 25 RELIEF 26 DEMAND FOR JURY TRIAL 27 28 CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT CASE NO. 12-CV-01382 PSG Case5:12-cv-01382-PSG Document50 Filed03/07/13 Page2 of 74 1 Plaintiffs Pedro Marti, David Nisenbaum, Robert B. DeMars, Lorena Barrios, Nicholas 2 Anderson, Matthew Villani, and Scott McCullough (“Plaintiffs”), by and through their attorneys, 3 bring this class action complaint on their own behalf and on behalf of all others similarly situated, to 4 obtain an injunction, damages, costs of suit, and attorneys’ fees from defendant Google, Inc. 5 (“Google”). Plaintiffs complain and allege, upon knowledge as to themselves and their acts, and 6 upon information and belief as to all other matters, as follows: 7 NATURE OF THE ACTION 8 1. This is a nationwide class action against Google on behalf of all persons and entities 9 in the United States that acquired a Google account between August 19, 2004 and February 29, 10 2012, and continued to maintain that Google account on or after March 1, 2012, when Google’s new 11 privacy policy went into effect. 12 2. Google is a technology and advertising company that provides free web-based 13 products to billions of consumers across the globe. Over one billion consumers use Google’s search 14 engine, google.com, each week; over 425 million consumers use Google’s web-based email service, 15 Gmail; and Google’s video sharing site, YouTube, streams over 4 billion videos per day to 16 consumers. 17 3. Google can offer these important, globally pervasive products free of charge to 18 consumers due to its primary business model – advertising. In 2011, Google’s revenues were $37.91 19 billion, approximately 95% of which ($36.53 billion) came from advertising. In 2012, Google’s 20 revenues increased to $46.04 billion, approximately 95% of which ($43.69 billion) came from 21 advertising. 22 4. Google’s advertising revenues are dependent upon its ability to deliver highly 23 relevant, targeted advertisements that are tailored to a consumer’s interests and online habits. In 24 order to accomplish this, Google logs personal identifying information, browsing habits, search 25 queries, responsiveness to ads, demographic information, declared preferences, and other 26 information about each consumer that uses its products. Google’s Gmail service also scans and 27 discloses to other Google services the contents of Gmail communications. Google uses this 28 CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT 1 CASE NO. 12-CV-01382 PSG Case5:12-cv-01382-PSG Document50 Filed03/07/13 Page3 of 74 1 information, including the contents of Gmail communications, to place advertisements that are 2 tailored to each consumer while the consumer is using any Google product or browsing third-party 3 sites that have partnered with Google to serve targeted ads. 4 5. Prior to March 1, 2012, information collected in one Google product was not 5 commingled with information collected during the consumer’s use of other Google products. Thus, 6 Google did not, for instance, previously associate a consumer’s Gmail account (and therefore his or 7 her name and identity, his or her private contact list, or the contents of his or her communications) 8 with the consumer’s Google search queries or the consumer’s use of other Google products, like 9 YouTube, Picasa, Voice, Google+, Maps, Docs, and Reader. 10 6. Indeed, Google previously maintained a separate privacy policy for each of its 11 products, all of which confirmed that Google would use the consumer’s personal information strictly 12 in order to provide that particular product or service to the consumer, and that Google would not use 13 it for any other purpose without the consumer’s explicit consent. 14 7. On March 1, 2012, however, Google eliminated the majority of its separate privacy 15 policies and created one, universal privacy policy that enabled Google to cross-pollinate consumers’ 16 personal information, including the contents of electronic communications in Gmail, across Google 17 products, despite prior representations that Google would not use that information for any purpose 18 other than to provide that specific service to the consumer. As stated by Google: 19 Our new Privacy Policy makes clear that, if you’re signed in, we may combine information you’ve provided from one service with information from other services. 20 In short, we’ll treat you as a single user across all our products, which will mean a simpler, more intuitive Google experience. 21 22 8. But this “simpler, more intuitive Google experience” comes at a tremendous cost to 23 the privacy interests and the legal rights of Google’s users, as explained in more detail herein. 24 Following Google’s introduction of the unified privacy policy, Google now uses detailed and highly 25 specific personal information gathered from multiple product platforms, including the contents of a 26 consumer’s Gmail communications, to optimize search results and, thus, Google’s ability to display 27 targeted ads when that consumer uses the google.com search engine or other Google products that 28 CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT 2 CASE NO. 12-CV-01382 PSG Case5:12-cv-01382-PSG Document50 Filed03/07/13 Page4 of 74 1 employ querying, or when that consumer visits third-party sites that have partnered with Google in 2 its advertising networks. 3 9. The new privacy policy thus commingles user data without consumers’ consent, and 4 it no longer allows consumers to keep the personal information and communications contained on 5 one Google service separate from information gathered about the consumer by other Google 6 services. By implementing the new privacy policy, Google violated its prior privacy policies and 7 rendered them misleading because they stated that Google would not utilize information provided by 8 a consumer in connection with his or her use of one product, with any other product, for any reason, 9 without the consumer’s explicit consent. 10 10. Google’s new privacy policy also violates consumers’ privacy rights, because it 11 allows Google to take information from a consumer’s Gmail account, for instance, which may have 12 one (higher) expectation of privacy, and use it in a different context, such as to personalize results 13 from the Google search engine, or to personalize advertisements viewed while the consumer is 14 surfing the internet, practices with respect to which a consumer has an entirely different (lower) 15 expectation of privacy. It thus provides to those services with different kinds of information that 16 they were not originally intended to have access to. Moreover, this cross-pollination is achieved 17 through independent third party entities that “process” and are thus exposed to users’ personal 18 information, including the contents of their Gmail communications. 19 11. Similar cross-referencing of billions of consumers’ personal information previously 20 resulted in an October 13, 2011 Consent Order with the Federal Trade Commission (“FTC”), in 21 which the FTC found that Google deceptively claimed it would seek the consent of consumers 22 before using their information for a purpose other than for which it was collected, and that Google 23 had misrepresented consumers’ ability to exercise control over their information. In announcing the 24 Consent Order, Jon Leibowitz, Chairman of the FTC, stated, “when companies make privacy 25 pledges, they need to honor them.” 26 12. Google’s products and services have become a staple of society, and billions of 27 consumers across the globe are affected by Google’s new privacy policy. On February 22, 2012, 28 CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT 3 CASE NO. 12-CV-01382 PSG Case5:12-cv-01382-PSG Document50 Filed03/07/13 Page5 of 74 1 thirty-six Attorneys General wrote in an open letter stating, “This invasion of privacy will be costly 2 for many users to escape. For users who rely on Google products for their business – a use that 3 Google has actively promoted – avoiding this information sharing may mean moving their entire 4 business over to different platforms, reprinting any business cards or letterhead that contained Gmail 5 addresses, re-training employees on web-based sharing and calendar services, and more.” 6 13. Google’s display advertising revenue is second in the United States only to Facebook. 7 Facebook garners a larger market share of display advertising revenue because consumers that use 8 Facebook set up, manage, maintain, and populate personal profiles with very specific information 9 about themselves.