Google's Parent Alphabet (NASDAQ:GOOGL) stock is trading lower today. The Italian Competition Authority has launched an investigation into Google and its parent company Alphabet (NASDAQ:GOOG), regarding their methods for obtaining user consent for linking data across various services.
The probe focuses on how Google requests consent from users to link data across its services, such as Google Search, YouTube, Chrome, and Maps.
The Italian regulator suspects that Google may provide inadequate or misleading information about the effects of this consent.
The Authority alleges that Google's consent requests might lack transparency about the scope and implications of combining user data across multiple services. This could lead users to unknowingly consent to broader data use than intended.
The investigation also examines whether Google employs techniques that could influence consumer decisions.
The Authority is concerned that these methods might pressure users into consenting to data practices they might otherwise reject.
In response to the investigation, a Google spokesperson stated, "We will analyze the details of this case and will work cooperatively with the Authority," TechCrunch reports.
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Google has been subject to the EU's Digital Markets Act (DMA) since early March, which mandates that companies obtain explicit consent before processing users' personal data for advertising or combining data from different services.
The DMA, which includes regulations that align with the General Data Protection Regulation (GDPR), requires consent to be "freely given, specific, informed, and unambiguous."
This investigation could have significant implications for how Google manages user data within the European Union.
However, Google has announced some of the changes including a new search page layout for European users, with dedicated aggregator units with links to aggregator sites from across the web to comply with the DMA.
Italy's investigation also touches on the broader issue of "dark patterns" in online consent flows, where design techniques can manipulate users into making choices they might not otherwise make.
The EU's Digital Services Act (DSA) bans such deceptive designs, aiming to protect users' ability to make free and informed decisions.
Alphabet stock has gained about 43% in the last 12 months. Investors can gain exposure to the stock via the Communication Services Select Sector SPDR Fund (NYSE:XLC) and Vanguard Communication Services ETF (NYSE:VOX).
Price Action: GOOGL shares are trading lower by 1.62% at $179.65 at the last check on Thursday.
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Photo by Pawel Czerwinski on Unsplash.