Google to quit tracking incognito data from users — and it'll hurt revenue

Fast Facts

• Newly unsealed documents revealed new info about Google's revenue associated with data collection
• This comes as a 2020 lawsuit about tracking data in incognito mode forces the company to stop tracking for five years
• In order to seek monetary compensation for damages, members of the class covered by the suit must sue Google individually

Browsing in incognito mode on Alphabet's Google  (GOOG)  made many feel as if they were using the web privately — that is, until the truth about that user data finally became public.

In 2020, a class-action lawsuit was filed against Google in federal court in California, alleging that the search, advertising and cloud-services giant was tracking user data in private browsing mode. 

The lawsuit stated that the practice revealed the "most intimate and potentially embarrassing things" that people search for online, turning Google into an "unaccountable trove of information."

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Four years later, Google has agreed to destroy the billions of data records it obtained in this manner as a part of settling the lawsuit. While the plaintiffs sought $5 billion, Google is paying no damages, but users may sue the company individually.

However, some new information has emerged about the why of Alphabet doing what it did. 

Digital Content Next Chief Executive Jason Kint shared a tweet on the evening of April 1, pointing out a fascinating bit of info he found in the newly unsealed lawsuit documents: the enormous amount of money Google will lose by being forced to stop collecting user data in incognito mode.

"wow. super interesting data point on impact to Google's revenues from 3rd party cookie blocking (aka privacy)... connecting dots. Left: Google's redacted estimate of impact on blocking 3rd party tracking cookies in Chrome's private mode (aka Incognito). Right: unsealed today," Kint writes.

wow. super interesting data point on impact to Google's revenues from 3rd party cookie blocking (aka privacy)... connecting dots.

Left: Google's redacted estimate of impact on blocking 3rd party tracking cookies in Chrome's private mode (aka Incognito).

Right: unsealed today. pic.twitter.com/B1SBG2PlJg— Jason Kint (@jason_kint) April 1, 2024

Kint highlights a point made in the settlement: "[Blocking] data tagged with Google's own 'third-party cookies' in incognito already results in Google losing nearly $500 million a year in global annual revenue." 

The settlement, filed in San Francisco federal court, says Google backs the settlement but "disagrees with the legal and factual characterizations contained in the motion."

Google spokesman Jose Castaneda told The Wall Street Journal that the individual lawsuits arising from the matter were "meritless."

He told the paper that the company was fine with deleting "old technical data." He said that the information was never associated with an individual or used for any form of personalization.

The Journal reported that the settlement requires final approval from a federal judge.