Dive Brief:
- Alphabet’s total operating expenses increased 20% to $26.1 billion during the second quarter, driven largely by legal costs, CFO Anat Ashkenazi said Wednesday.
- Texas Attorney General Ken Paxton announced in May that he secured a $1.4 billion settlement with Alphabet over data privacy allegations.
- “The biggest driver of growth [in operating costs] was expense for legal and other matters, which reflected the impact of $1.4 billion charge related to a settlement in principle of certain legal matters,” Ashkenazi said during a Wednesday earnings call.
Dive Insight:
Government litigation in areas such as data privacy and antitrust has been a growing headache for big tech companies and their finance leaders in recent years.
Paxton sued Alphabet’s Google in 2022, accusing the tech giant of unlawfully tracking and collecting users’ private data regarding geolocation, incognito searches and biometric data.
In a May press release announcing the $1.4 billion settlement, Paxton’s office said the amount marked the highest recovery nationwide against Google for any attorney general’s enforcement of state privacy laws.
Meanwhile, the U.S. Department of Justice is pushing for the breakup of Google as part of a major antitrust case.
The litigation dates back to late 2020 when the first Trump administration and several states sued Google alleging that it had violated the Sherman Act by holding monopolies in the search and search advertising markets.
