Google Must Face Most Claims in Gmail Wiretap Lawsuit

Google Inc. (GOOG) must face most claims in a lawsuit alleging it illegally reads and mines the content of private messages sent through its Gmail e-mail service in violation of federal wiretap laws.

U.S. District Judge Lucy H. Koh in San Jose, California, today granted Google’s request to throw out state claims, while allowing the plaintiffs to refile. She refused to dismiss federal claims, rejecting the company’s argument that the plaintiffs agreed to let Google intercept and read their e-mails by accepting its service terms and privacy policies.

“The court finds that it cannot conclude that any party -- Gmail users or non-Gmail users -- has consented to Google’s reading of e-mail for the purposes of creating user profiles or providing targeted advertising,” Koh said in the ruling.

Users of Gmail and other e-mail services from states including Texas, Pennsylvania, Maryland and Florida contend that Google “does not disclose the extent of its processing,” according to a May 16 court filing. The case consolidates seven individual and group lawsuits.

“We’re disappointed in this decision and are considering our options,” Google said in an e-mailed statement. “Automated scanning lets us provide Gmail users with security and spam protection, as well as great features like Priority Inbox.”

‘Benefit Unrelated’

While explanations of how Google uses the information are blacked out in the complaint, plaintiffs say the Mountain View, California-based company exploits the content of messages “for its own benefit unrelated to the service of e-mail” and for profit, specifically to create user profiles and for its targeted advertising.

Google is also facing claims that the way it operated its Street View feature violated federal wiretap laws. A federal appeals court in San Francisco this month upheld a judge’s decision rejecting Google’s claims that the data it collected, including e-mails, user names, passwords and documents, wasn’t covered by the privacy protections of the U.S. Wiretap Act.

Google, operator of the world’s largest search engine, has argued that the complaint in San Jose should be thrown out because the law allows an “electronic communication service” to do automated scanning in the ordinary course of business to route and manage e-mail.

“Google can articulate a legitimate business purpose” that exempts it from liability under the wiretap laws, Whitty Somvichian, a lawyer for the company, told Koh at a Sept. 5 hearing.

‘Completely Automated’

The processes at issue “are a standard and fully disclosed part of the Gmail service” and the scanning of e-mail is “completely automated and involves no human review,” Google said in a court filing. E-mail providers such as Google “must scan the e-mails sent to and from their systems as part of providing their services,” the company argued.

The case is In re Google Inc. Gmail Litigation, 13-md-02430, U.S. District Court, Northern District of California (San Jose).

To contact the reporters on this story: Joel Rosenblatt in federal court in San Jose, California, at jrosenblatt@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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