Legal Issues

Google Fails to Dismiss Privacy Lawsuit Over Google Wallet

Google Fails to Dismiss Privacy Lawsuit Over Google Wallet
Image credit: Robert Scoble | Flickr

A federal judge has rejected Google Inc's request to dismiss a lawsuit accusing the technology company of invading the privacy of users of its Google Wallet electronic payment service by sharing their personal information with outside app developers.

In a decision on Wednesday night, U.S. District Judge Beth Labson Freeman in San Jose, California said Google must face claims it breached users' contracts, violated the federal Stored Communications Act which limits disclosure of electronic records, and violated a California consumer protection law. She also dismissed two other claims.

Freeman said Google Wallet users may try to show that Google "frustrated" the purpose of its own privacy policy by allowing "blanket, universal disclosure" of their personal information to app developers whenever they bought apps in Google's Play Store.

The lead plaintiff is Alice Svenson, an Illinois resident who said Google sent unnecessary personal information about her to YCDroid when she paid that developer $1.77 for an email app.

She said Google raised the risk of identity theft by routinely sending information about Google Wallet users such as addresses and zip codes, phone numbers and email addresses to app developers.

Svenson said the Mountain View, California-based company ceased the practice soon after the lawsuit was filed in Sept. 2013. Her lawsuit seeks class-action status, damages of $1,000 per violation, punitive damages and other remedies.

Google spokeswoman Anaik Weid declined to comment on Thursday. Lawyers for the plaintiffs did not immediately respond to requests for comment.

Launched in 2011, Google Wallet stores credit and debit card information, and lets shoppers pay for goods by tapping their phones against special terminals at store checkout counters.

To boost U.S. demand, Google in February partnered with AT&T Mobility, T-Mobile USA and Verizon Wireless to pre-install Google Wallet on Android smartphones.

In October, rival Apple Inc said it would include its Apple Pay mobile payment service in its iPhone 6 line.

The case is Svenson et al v. Google Inc et al, U.S. District Court, Northern District of California, No. 13-04080.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)

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