As Alphabet races to establish its AI dominance, its flagship unit, Google, faces two significant lawsuits in a single week. The tech giant has reached a preliminary agreement to settle two U.S. class-action lawsuits for more than $200 million.

This comes amid mounting pressure and additional probes from the European Union.

In filings lodged days apart in the U.S. District Court for the Northern District of California, Google has agreed to pay $68 million to resolve claims related to its voice-activated Google Assistant. Separately, it agreed to pay $135 million to settle allegations that its Android operating system improperly collected users’ cellular data, Reuters reported.

Both cases are pending judicial approval.

These U.S cases came as the European Commission opened new proceedings on January 26 against Google under its Digital Markets Act (DMA). The proceedings define how Google must comply with rules governing interoperability with hardware and software features controlled by Google’s Android operating system.

They also address Google’s obligation to give third-party providers of online search engines access to search-related data. Together, the cases demonstrate how data-handling concerns have now reached a global scale.

Despite the lawsuits, Alphabet’s stock is up 7% this month.

Photo by BoliviaInteligente on Unsplash

Hey Google, are you listening? The $68M Google Assistant settlement

The $68 million settlement from Google is set to resolve a long-running lawsuit (filed in 2019) that alleged that Google Assistant recorded private conversations without users’ consent.

The plaintiffs argued that their conversations were monitored and recorded even when they did not use “hot words” such as “Hey Google” or “Okay Google,” which usually indicate intentional activation.

More AI Stocks:

  • Morgan Stanley sets jaw-dropping Micron price target after event
  • Bank of America updates Palantir stock forecast after private meeting
  • Morgan Stanley drops eye-popping Broadcom price target
  • Nvidia’s China chip problem isn’t what most investors think
  • Bank of America sets AI stocks to buy list for 2026

It’s true that sometimes the listening is activated when the Assistant hears words that are similar to hot words, known as “False Accepts.”

But while at other times the recordings are completely overwritten, the plaintiffs in this case alleged that Google continues to store these recordings and uses them to improve functionality or for advertising purposes. 

Google and Alphabet have agreed to pay $68 million to settle to avoid further litigation, but denied any wrongdoing.

People who bought any Google device between 2016 and the date the court grants approval will be eligible to receive some monetary reimbursement under the class action lawsuit. 

  • Device purchasers could receive $18 to $56 per device.
  • Members with “privacy only” or who were recorded but did not purchase the device could receive $2-$10. 
  • Final approval hearing is set for March 19, 2026.

Data hijacking claim: Why is Google paying $135M?

Shortly after the Google Assistant case, Google also agreed to a $135 million settlement in a separate class-action lawsuit. The lawsuit, Taylor et al. v Google LLC, dockets accessed via Bloomberg Law, was filed in November 2020 in the U.S. District Court for the Northern District of California.

Plaintiffs alleged that Google’s Android operating system collected and transferred cellular data without consent. The plaintiffs described it as “conversion,” which occurs when one party takes another’s property without authorization and deprives the owner of its use.

In this case, the plaintiffs are treating the cellular data as their own property, which they allege Google misused.

Related: McDonald’s accused of misleading customers on McRib

It means that Google consumed cellular data paid for by the users (here, the plaintiffs) without their consent or knowledge, even when their phones were off or apps were disabled. The allegation has raised privacy concerns and questions the “passive information transfers and the means by which they occur.”

The lawsuit alleges that although the data transfer occurred even when the phones were not in use and apps or location services were disabled, Google benefited from the data. As part of the settlement, Google has agreed to pay $135 million in settlement.

If the settlement amount is approved, it would allow Android mobile device users between November 2017 and the date of final judgment to seek monetary payment from Google. The payment is capped at $100 per class member.

The trial date has been set for August 5, 2026.

What will change for Android users?

  • Changes in Google Play Terms of Service.
  • Changes to the webpage describing the Android functions.
  • Change in screens on which all users must click “accept.”
  • Google will also include a toggle switch during phone setup, allowing users to opt out of background data transfers.

The Digital Markets Act and Google’s AI future

Now, on top of all the settlement woes facing Alphabet’s Google, it is set to face two proceedings in Europe under its digital market laws.

“Artificial intelligence tools are transforming the way we seek and receive online information on our smartphones and even how we interact with our devices,” said Executive Vice-President of the European Commission for a Clean, Just and Competitive Transition Teresa Ribera. “This creates new opportunities.”

“With today’s proceedings, we want to help Google by explaining in more detail how it should comply with its interoperability and online search data sharing obligations under the Digital Markets Act,” Ribera added.

The European Commission has asked Google:

  • To provide third-party developers with free and effective interoperability with hardware and software features that Google uses for its own apps
  • To grant third-party online search engine providers access to anonymized ranking, query, clock, and view data held by Google Search on Fair, Reasonable, and Non-discriminatory (FRAND) terms

The proceedings are expected to conclude in six months.

Related: Subaru settles long-running driver-assistance class-action lawsuit