Alphabet Inc (NASDAQ: GOOG), (NASDAQ: GOOGL) offers free services so good that people don’t mind the firm tracking their every move online. How would you feel, however, if Google started spying on you in real life? You don’t have to wonder any longer, apparently. Privacy groups say that the tech omnipresence is now tracking offline purchases.
A legal filing from the Electronic Privacy Information Center alleges that Alphabet Inc now has access to huge amounts of credit and debit card purchase data. It’s trying to force the firm to reveal where it’s getting that information. That would give consumers the option to avoid being tracked.
The complaint, and allegations about Alphabet Inc, were reported by The Washington Post on Sunday night.
Alphabet Inc can see your credit cards
“Google is seeking to extend its dominance from the online world to the real, offline world, and the FTC really needs to look at that.”
That quote, which may be chilling to some, comes from Marc Rotenberg the head of the Electronic Privacy Information Center.
Alphabet Inc (NASDAQ: GOOG), (NASDAQ: GOOGL) wants to track offline purchases because it allows it to link search and web advertising to real world effects. Advertising attribution is a big problem that the firm needs to solve in order to prove the value of its services to advertisers.
The program at the center of the privacy complaint involves Google getting access to the credit card and debit card information of millions of US consumers. The firm then matches that data with users of Google services.
The result is that Google can measure whether online impressions on Coca Cola ads drive increases in Coca Cola sales in brick and mortar stores. It’s an impressive evolution in advertising data analysis, but it could be very worrying for users of the firm’s services.
Google says that the data it collects is anonymized. The source of the data and the encryption used to protect it are at the heart of this case.
Alphabet stock is in legal jeopardy
Of all of the risks facing Alphabet stock, it appears that legal problems may be the most grave. The firm has already been injured in a scrape with European regulators this year. There are a number of ongoing cases involving the firm, and this suit is just the tip of the iceberg.
If the firm is investigated for its consumer data hoard, and impropriety could result in a lawsuit. Any protracted legal proceedings could block it from using its new tech, and result in some people betting against Alphabet stock.
On this morning’s market those shares were falling. At time of writing stock was selling for $931.91, down more than 1 percent for the morning’s trading so far. As there was choppy trading across the tech world on Monday, it’s impossible to attribute that to the firm’s legal troubles directly.
What is clear, however, is that every innovation Alphabet Inc (NASDAQ: GOOG), (NASDAQ: GOOGL) engages in opens it up to consumer backlash. Google has paid fines for its privacy invasions in the past, but it’s never really suffered a big user backlash. Advertisers are another matter.
Real world tracking could be what puts people over the edge, but if history is indicative Google will be fine. That’s because only a minority of people seem to act on privacy concerns.