SAN FRANCISCO (CN) — Google must face claims it illegally snooped on customer service phone calls with its artificial intelligence tool, a federal judge in California ruled Monday.
A class of consumers claims Google violates the California Invasion of Privacy Act, which prohibits the unauthorized recording and interception of phone conversations, with its Google Cloud Contact Center AI — a suite of tools designed to improve the efficiency of businesses’ customer service centers.
The product offers companies an AI-powered virtual assistant that supports human customer support agents with various tasks by transcribing calls in real-time, drawing connections between relevant information and offering suggested “smart replies” to save time on support tickets.
The service is already in use by large companies like Verizon, Hulu, GoDaddy and Home Depot, among others, according to the complaint.
The consumer plaintiffs take issue with the fact that Google’s AI transcription and analysis is not disclosed to callers.
U.S. District Judge Rita F. Lin denied Google’s motion to dismiss the case, saying that if the plaintiffs’ claims are true, it’s possible the Alphabet company violated California wire-tapping law.
“Plaintiffs have adequately alleged that Google ‘has the capability to use the wiretapped data it collects … to improve its AI/ML models,’” the Joe Biden appointee wrote.
When a consumer calls into one of these AI-powered contact centers, they may first be presented with a virtual agent provided by Google. Virtual agents are not identified as being provided by Google, and the plaintiffs argue that consumers would reasonably believe the virtual agent is provided by the company they are calling.
In the plaintiffs’ view, when Google collects and analyzes call data at the request of its business customers, it is akin to a third-party who received an invitation from one of the callers without the others’ knowledge.
The plaintiffs are seeking statutory damages of $5,000 for each violation of the privacy act, a declaration that Google’s conduct was unlawful and attorney fees.
They filed their lawsuit in the U.S. District Court for Northern California in October 2023.
The court dismissed the class action in June 2024 with leave to amend. The plaintiffs repaired the lawsuit and refiled in July 2024.
In her 11-page order, Lin considered Google’s arguments that it shouldn’t be held liable under the state privacy act. The tech company argued it is not a, “unauthorized” third party under the meaning of the statute and not a participant in the calls at all. Rather, it claims it simply provides a software tool that businesses may use to lawfully record and analyze their calls, like anyone would with a tape recorder.
The judge didn’t buy these analogies, citing case law that confirmed courts could identify “third-parties” based on the capability to use user data to their benefit, regardless of whether or not they actually did so. This, she called the “capability test.”
She remained unconvinced by Google’s further assertions that it wasn’t “capable” of using the data, because it was contractually prohibited from doing so without authorization.
“Google does not dispute that it is technologically capable of using the call data for an independent purpose, and this is what the capability test measures,” she wrote.
Lin also struck down the company’s arguments attempting to separate the call center software from Google itself.
“When GCCCAI ‘learns’ the content of the call, that is the same as Google ‘learning’ it,” the judge said.
The judge similarly found Google’s arguments that only landline calls were entitled to relief “overly narrow.”
Neither Google nor the plaintiffs’ attorneys immediately responded to requests for comment Monday evening.
Lead plaintiff Misael Ambriz first filed this action against Google in October 2023, claiming that the company wiretapped his customer service calls with Verizon in violation of state law.