A federal judge in San Francisco has agreed with Alphabet's Google to dismiss parts of a lawsuit that accused the tech company of misleading investors regarding its digital advertising practices and user privacy safeguards.
US District Judge Rita Lin has stated that the plaintiffs can proceed with their claim asserting that a written statement made by Alphabet's CEO Sundar Pichai to Congress in 2020 was inaccurate.
Shareholders who filed a suit against Google in 2023 argue that the company manipulated online advertising to advantage bids from its own platforms or through a partnership agreement with Facebook, owned by Meta.
The lawsuit claims that Google engaged in securities fraud by making public statements that presented the advertising market and its auction-based system for selling ads as extremely competitive.
Early this week, Google asserted that it "operates a fair first-price auction, regardless of the source of the bid." The company has denied any wrongdoing.
The order issued on Monday noted that the investors could not demonstrate that Google acted with the required "state of mind" regarding some of its statements.
Lin mentioned that a company does not commit securities fraud "every time there is a significant error on its website that contradicts facts known to the CEO."
Google is also responding to other lawsuits that challenge its digital advertising operations.
Last year, a US judge in Virginia oversaw a trial related to a case filed by the US Department of Justice along with several states, but a ruling has yet to be issued. Google has rejected the allegations.
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The case is AMI - Government Employees Provident Fund Management Company v. Alphabet Inc. et al, in the U.S. District Court for the Northern District of California, No. 3:23-CV-01186-RFL.