Google on Monday agreed to pay $392 million to settle a landmark privacy case with 40 US states over accusations that the search engine giant misled users into believing location tracking on their devices had been switched off.

A statement by Oregon Attorney General Ellen Rosenblum said it was the largest multi-state privacy settlement by authorities in US history and included a binding commitment by Google for improved disclosures on targeting for customers.

Google had been "crafty and deceptive", Rosenblum added, as she announced the company's agreement to pay up to end the case.

"Consumers thought they had turned off their location tracking features on Google, but the company continued to secretly record their movements and use that information for advertisers," she added.

The rare joint lawsuit by 40 states grew from impatience over the failure of federal authorities to crack down on big tech amid legislative gridlock in Washington.

Republican and Democratic lawmakers disagree on what national rules on online privacy should look like, with furious lobbying by tech companies to limit their potential impact.

This is in marked contrast to Europe where the US tech giants have faced strict rules on privacy since 2018, with Google, Amazon and others subjected to hefty fines after violations.

In South Korea, Google and Meta in September were fined a record of $71 million collectively for gathering users' personal information without consent for tailored ads.

These decisions come in addition to the big antitrust penalties that have seen the European Union fine Google a total of 8.25 billion euros ($8.5 billion) since 2017.

- 'Changed years ago' -

The US case began after an article in 2018 from The Associated Press reported that Google tracked users even when they had opted out of the practice.

Other states involved in the case included Arkansas, Florida, Illinois, Louisiana, North Carolina, Pennsylvania and Tennessee.

Specifically at fault by Google was evidence that users continued to be tracked when they disabled the location history option on their phones as tracking continued through a separate Web & App Activity setting.

In a statement, Google said that the allegations were based on product features that were no longer up to date.

"Consistent with improvements we've made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago," the company said.

Under the settlement, Google will provide more detailed information on tracking activity.

In a tweet following the settlement, the main lobby for big tech urged US Congress to adopt common privacy rules.

"It's important that baseline rules both protect users and support innovation," the Computer & Communications Industry Association added.

arp/dw

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