Judge Refuses to Dismiss Google Wallet Data Privacy Lawsuit

A federal judge rules that the plaintiff produced sufficient facts to go forward with a lawsuit that claims Google breached its obligations to users of its Wallet payment service.

Google Wallet Suit 2

A federal judge in California has refused to dismiss a putative class action lawsuit filed against Google that accuses the company of having shared private data belonging to Google Wallet customers with third parties.

In an 18-page ruling earlier this week, Judge Beth Freeman of the U.S. District Court for the Northern District of California held that the plaintiffs in the case had alleged sufficient facts to show that Google may have breached its contractual obligations and California's Business and Professions Code.

She however dismissed two other claims alleging that Google had violated provisions of the federal Stored Communication Act (SCA) in making Google Wallet customer data available to third parties.

Freeman's ruling partly reverses one from last August, where she had originally granted Google's motion to dismiss the claims brought against it by Alice Svenson, the lead plaintiff in the case. At that time, the judge held that Svenson had failed to properly state a claim or show how she, and other Wallet users, might have suffered damages from Google's alleged misconduct.

The judge's ruling this week is on an amended complaint filed by Svenson and allows for the case to be heard in court.

A Google spokesman declined to comment on the judge's decision.

Svenson originally filed the lawsuit against Google in September 2013 after the company allegedly shared her personal information with YCDroid, a software developer whose software she had purchased using Wallet.

Svenson claimed that Google had shared personal information, such as her name, phone number, email and other data, with YCDroid though the developer had no need for that information in order to complete the transaction.

Svenson said that in doing so, Google had breached its agreement not to share Wallet customer data with others unless the data was required for specific purposes like processing a transaction or maintaining a user's account.

Google's privacy policies for Wallet at that time allowed the company to share personal information only with explicit consent from the user and only with domain administrators, for legal reasons and for external processing.

Svenson noted that Google has changed its policies regarding sharing of Wallet customer data with third parties, but only after she had filed the case.

In her ruling this week, Freeman noted that Svenson had enough facts to allege breach of contract, implied covenant and violation of the California Business and Professional code.

If the case proceeds to trial, it is sure to once again focus attention on Google's data sharing habits. Google is trying to broaden its footprint in the online payment space and in other areas that require it to collect and store a lot of customer financial data.

Svenson's claims that Google failed to live up to its own privacy policies and that the company shared a lot of unnecessary data with third-party vendors are unlikely to sit well with those already concerned about its business practices.

As it is, Google has had a somewhat difficult time getting broad acceptance for its Wallet payment service. Although the company launched Wallet more than four years ago, its market share is only barely ahead of Apple Pay, even though the latter was launched less than six months ago.

The slow uptake of Wallet likely has nothing to do with concerns over Google's data sharing policies. But a case that focuses on the privacy of customer data is an aggravation that Google can probably do without right now as it continues to try to grow the use of Google Wallet.

Jaikumar Vijayan

Jaikumar Vijayan

Vijayan is an award-winning independent journalist and tech content creation specialist covering data security and privacy, business intelligence, big data and data analytics.