US judge dismisses lawsuit claiming Google illegally recorded customer calls for AI training

A United States federal judge has dismissed claims that Google violated privacy laws by recording customer service phone calls to train its artificial intelligence systems.

US District Judge Rita F. Lin ruled in San Francisco that callers who agreed to retail terms and conditions had consented to service recordings being handled by external technology vendors. The class action lawsuit involved businesses such as Home Depot and Discover, which use Google Cloud Customer Center AI to run virtual call centres and assist phone agents.

The plaintiffs alleged that Google continued to record conversations even after calls were transferred from automated virtual assistants to human staff, without clearly telling callers that Google was listening in. They argued this breached the California Invasion of Privacy Act.

Judge Lin rejected those arguments for account holders, noting that the retail agreements clearly incorporated privacy policies allowing call recordings to be shared with third-party service providers. The court dismissed the claims of three plaintiffs while granting them leave to file an amended complaint, and sent three other plaintiffs into arbitration.

Google Cloud Customer Center AI is widely adopted across commercial customer support teams to analyse call sentiment, transcribe conversations, and train business-specific language models.

What this means for Australian businesses

Australian companies using AI tools to handle phone support, transcribe customer calls or summarise meetings face strict local privacy rules.

• Check your service supplier terms. Cloud vendors often default to using transcription and voice inputs to train their underlying systems. Businesses should choose commercial tiers that explicitly exclude company data from AI model training.
• Review your recorded disclosures. Informing callers that a call may be monitored for quality purposes does not automatically cover processing or AI training by third parties. Your phone greeting and privacy collection notices must state clearly if calls are being analysed by external software.
• Update your website privacy statement. As customer data laws tighten under Australian Privacy Act reforms, businesses need clear wording in their terms showing which outsourced platforms receive and process voice recordings.