Breakdown: Home Depot Hit by Google’s Cloud CX Legal Troubles

Google’s AI-powered, cloud CX platform has put the company on the wrong side of a lawsuit once more. This time, though, the tech giant isn’t alone. Home Depot, a user of Google’s platform, is feeling the heat too.

What’s happening?: A class action lawsuit was filed on February 14, 2024 against both Home Depot and Google alleging that they violated California’s Invasion of Privacy Act (CIPA).

• The lawsuit accuses Google of using its cloud CX platform (known as GCCCAI) to “wiretap”, record and analyze the phone conversations of Home Depot customers and the retailer’s customer service agents.
• By hiring Google’s GCCCAI service, Home Depot allegedly aided Google in the supposed invasions of customer privacy, according to the complaint.

In detail: The complaint states that the plaintiff contacted Home Depot’s customer care center, with his first interaction being with a virtual agent. He was then transferred to a human agent. 

• The interactions with Home Depot’s customer representative were being monitored by a Google virtual agent connected to its CCCAI platform. Such activities are essential to Google’s portfolio of AI-based cloud CX services.
• The plaintiff was allegedly unaware that his interactions were being monitored and recorded by Google.

Looking back: A very similar lawsuit was filed against Google in October of 2023. You can read a detailed account of that case here.

• The previous lawsuit –which is still ongoing– was issued in representation of Verizon customers who unknowingly interacted with Google’s cloud CX platform. 
• Verizon was explicitly mentioned in the lawsuit, but not listed as a defendant. 

Zeroing in: The more recent lawsuit underscores Home Depot’s supposed role in the alleged CIPA violations. 

• “Californians who called Home Depot customer service had their privacy violated when Home Depot allowed Google to access, record, read, and learn the contents of their calls,” the complaint states.

How costly?: CIPA states that people bringing action due to privacy violations can receive a compensation of US$5,000 for each violation.

Counterpoint: In the previous lawsuit, Google argued that the whole complaint should be dismissed because its cloud CX platform is only a “software tool”, not a third party involved in the calls.

• Google characterized its platform as “the modern equivalent of a tape recorder” bought, in that particular case, by Verizon to use in customer service calls.
• In that sense, Google wouldn’t be participating as a “man-in-the-middle” during customer care calls. The company would only be providing a sophisticated tool for the recording of those interactions, thus being free from all CIPA-related liabilities.

History lesson: CIPA was enacted in 1967 to protect Californians from “new devices and techniques for the purpose of eavesdropping upon private communications.” 

Expert’s take: “One thing is certain: companies should over-share with customers who is on the call and what is done with the data,” commented John Walter, COO at CX outsourcing advisory firm ZMAXINC.

• “All these companies are getting in trouble because they are not first obtaining consent from the customer,” he added.

A matter of business: AI-driven cloud CX platforms have grown quite common in the market over the past couple years due to their capabilities to automate customer service interactions, analyze large swaths of data and improve agents’ performance.

• Many CX providers offer cloud CX solutions of their own. Several big tech companies –Google, Microsoft, Amazon and Zoom, just to name a few– have also entered that segment of the market.
• Google’s platform in particular has been used by organizations such as GoDaddy, easyJet, Telus International and even the Illinois Department of Employment Security.

NSAM’s Take: We can’t say what will be the result of any of the two lawsuits involving Google’s cloud CX platform. What we can see, though, is users of these platforms and other AI-powered technologies growing weary of the legal implications of their deployment in customer-facing situations. 

AI is rapidly proving that there’s substance behind much of its hype, but organizations are still grappling with the nuances of its successful implementation and deployment. In that context, data security, privacy and compliance fears remain one of the main hurdles for decision makers giving thought to AI investment. 

The fact that Home Depot was listed as a defendant in the most recent GCCCAI lawsuit will add to those fears. There are other 14 states besides California with comprehensive customer data privacy laws. Though the Google/Home Depot lawsuit has yet to determine if users of AI cloud platforms can incur in violations of customer privacy laws, the fact that the case is still ongoing will serve as a warning of potential legal headaches.

This doesn’t necessarily mean the end of GCCCAI and similar platforms. Like other technologies –recent ones or that have been in use for decades– , AI in cloud CX platforms will most probably adapt to whatever interpretation of consumer privacy laws is made by the courts.

This might take the form of modified or extra disclaimers in customer care interactions, added language in SLAs or a couple more paragraphs in terms of service.