In a landmark agreement, Google has consented to pay $1.375 billion to the state of Texas to resolve allegations of privacy violations related to user data. Texas Attorney General Ken Paxton announced the settlement on May 9, 2025, marking a significant moment in the ongoing scrutiny of big tech companies and their handling of personal data.
This settlement stems from lawsuits filed in 2022, where Texas accused Google of unlawfully tracking and collecting users’ private data, including geolocation, incognito searches, and biometric information. Paxton characterized the settlement as a "historic win" for the privacy rights of Texans, emphasizing that "in Texas, big tech is not above the law." He stated, "For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won." The agreement settles two lawsuits that covered three Google products, which allegedly contravened Texas consumer protection laws.
Despite the substantial financial settlement, Google did not admit to any wrongdoing. A spokesperson for the company, José Castañeda, noted that the settlement resolves a "raft of old claims" regarding product policies that have already been changed. He added, "We are pleased to put them behind us, and we will continue to build robust privacy controls into our services." Notably, the settlement does not require Google to alter its business practices or disclose any changes to its products.
The lawsuits highlighted serious concerns about how Google collected data from users without proper consent. In particular, Paxton alleged that Google had collected facial geometry and voiceprint data from Texas residents and tracked users’ locations even when they believed they had disabled the feature. Furthermore, the attorney general claimed that Google misled users regarding the privacy protections of its Incognito mode, which is intended to offer private browsing.
This settlement is the largest any state has secured against Google for similar privacy violations, significantly surpassing previous settlements. For context, last year, Texas also secured a $1.4 billion settlement from Meta, the parent company of Facebook, for unlawfully collecting residents’ facial recognition data. In comparison, no other state has received more than $93 million from Google to settle data privacy claims, and a coalition of 40 states collectively settled for $391 million, which is nearly $1 billion less than the Texas settlement.
Paxton's office did not disclose how the settlement funds would be allocated or if any portion would be returned to Texans. However, the implications of this settlement extend beyond financial compensation; it sends a strong message to tech companies about the importance of user privacy and accountability.
Following the announcement, shares of Google’s parent company, Alphabet, experienced volatility. The stock initially rose to a high of $156.14 shortly after trading opened but fell to a low of $153.95 during afternoon trading. After-hours trading saw a slight recovery to $154.17, although the share price continued to decline the following day, reaching a low of $152.27.
In light of this settlement, many are left wondering what the future holds for data privacy regulations and tech companies' responsibilities. As states like Texas take a more aggressive stance against data privacy violations, other states may follow suit, potentially leading to a wave of similar lawsuits against major tech firms.
Paxton has previously expressed concerns about the unchecked power of big tech companies and their impact on consumer privacy. In his ongoing efforts, he has hired outside law firms to represent Texas in these high-stakes legal battles. For the Google case, the law firm Norton Rose Fulbright has been engaged, operating under a contingent-fee contract, which means they will only be compensated if Texas prevails in its litigation.
The contracts specify that Norton Rose Fulbright could receive between 10% and 27% of the total settlement amount, translating to a potential payout of $137 million to $371 million, depending on the final agreement. This arrangement underscores the financial stakes involved in holding tech companies accountable for their practices.
As the tech landscape continues to evolve, the outcome of this settlement may set a precedent for how data privacy cases are handled in the future. It raises critical questions about user consent, transparency, and the ethical responsibilities of companies that collect vast amounts of personal data.
In a world increasingly reliant on digital services, the balance between innovation and privacy remains a contentious issue. With Texas leading the charge against perceived injustices in data handling, other states may feel empowered to pursue similar actions, potentially reshaping the regulatory environment for tech companies across the nation.
As the dust settles on this historic settlement, it remains to be seen how Google will adapt its practices moving forward and whether other companies will take heed of the growing scrutiny surrounding data privacy. The Texas case serves as a reminder that consumers are demanding greater accountability from the tech giants that shape their online experiences.
