An Australian regulator has filed a Federal Court case against Google, alleging it misled consumers into thinking they had disabled location-tracking - when, in fact, the search-ad giant was still able to track every move they made.

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The Australian Competition and Consumer Commission (the ACCC) claims Google's Android menu settings from January 2017 until late 2018 were misleading, including that users' location data would continue to be sent to Google even if the 'Location History' option was switched off.

Android is the Google software used to run smartphones made by Google itself, plus models made by the likes of Samsung, Motorola, Huawei, Sony and LG.

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The collection of location data focuses on two Google Account settings: one labelled 'Location History'; and another labelled 'Web & App Activity,' the ACCC said in a statement.

Both settings need to switched off to stop Google tracking your movements.

The ACCC alleges that during the period in question, Google did not properly disclose that fact.

"Our case is that consumers would have understood as a result of this conduct that by switching off their 'Location History' setting, Google would stop collecting their location data, plain and simple," ACCC chairman Rod Sims said.

"We allege that Google misled consumers by staying silent about the fact that another setting also had to be switched off."

NZ watchdog eyes proceedings

The ACCC and its equivalent in New Zealand, the Commerce Commission, have commissioners in common under a cross-pollination setup.

However, on this side of the Tasman it's still a watching brief.

"The Commerce Commission does not have a current investigation, but we have noted the allegations by the ACCC against Google and will be following the outcome of the Federal Court proceedings," a spokeswoman told the Herald.

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A Google Australia New Zealand spokeswoman said, "We are currently reviewing the details of these allegations. We continue to engage with the ACCC and intend to defend this matter."

In June, the company said it had added new privacy controls, including a new feature where location and search data would be auto-deleted after a set period.

NZ Privacy Commissioner John Edwards welcomed the move, but said it would be better if Google took a "privacy by design" approach, enabling the new settings the default rather than requiring users to switch them on.

This afternoon, asked if he would like to see the ComCom follow the ACCC's lead, Edwards said, "The cross-jurisdictional approach between privacy, consumer rights and competition is also an international trend that I'm keen to see develop more in New Zealand.

"With the Privacy Act's limited enforcement powers it is important that I and other regulators collaborate to ensure that those weaknesses are not exploited to the detriment of New Zealand consumers."

The ACCC alleges consumers thought turning off "Location History" was enough to storp Google tracking them - when in fact they also had to disable a second setting, too: Web & App Activity:

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