Privacy win may spark litigation in NZ courts

A win by an Australian watchdog over data collection could see similar litigation become more common in New Zealand.

Australian courts recently found Google’s privacy settings misled consumers over whether their location data was being stored on Android devices because although the information was in the terms and conditions, it was not clear.

Law firm Bell Gully senior associate Richard Massey said the case would be of interest to New Zealand regulators.

‘‘Past experience has shown the Commerce Commission in New Zealand has quite closely monitored the activities of the Australian Competition and Consumer Commission (ACCC), and it will certainly have taken an interest in this case.

‘‘The fact that the ACCC has obtained a favourable outcome is likely to embolden the commission to take similar litigation,’’ Massey said.

The ACCC brought the case which focused on two particular settings of the Android devices: web and app activity, and location history. The default settings showed location history as off, however, Google could still obtain location data through the web and app activity setting if it was turned on. The ACCC’s claim was that a reasonable consumer would assume having location history switched to off would protect their location data, although in the privacy and terms section it did explain data could still be collected.

Massey said it was interesting the judge did not view a consumer’s acceptance of the terms and conditions as the be-all and end-all. ‘‘Traditionally, the law has tended to find that if you expressly agreed to terms and conditions that you are on the hook for what you have signed up for, regardless of whether you read them or not.

‘‘What is quite striking about this judgment is it is simply that the terms were set aside on the basis that customers would have read through them very quickly and might not have grasped the full implications.’’

He said viewing this case as a consumer protection claim, rather than simply privacy, was also a turning point.

‘‘That is quite a significant shift because the tools available to regulators in general consumer law are far broader and more onerous than those available to the Privacy Commissioner in both jurisdictions,’’ Massey said.

‘‘So I think that is what that is, one of the reasons this judgment is considered to be quite significant is it sort of marks a transfer of responsibility from the traditional privacy mechanisms over to broader consumer law.’’

He said the case should serve as a warning to all organisations and businesses that collected information digitally.

‘‘The greater consequences in terms of enforcement by regulators is really characterised by the penalties available under the Fair Trading Act, which is New Zealand’s key consumer law legislation, which are significantly higher than the consequences that would be available under the Privacy Act,’’ Massey said.

Where a business commits an offence under the Fair Trading Act, the maximum penalty is $600,000 for a business.

Google is considering appealing the decision.

The ACCC case focused on two settings of the Android devices: web and app activity, and location history.