Alphabet CFO: Texas $1.4 Billion Settlement Pushes Up Q2 Operating Costs
Alphabet's second-quarter operating expenses rose 20% year-over-year to $26.1 billion, with CFO Anat Ashkenazi citing the $1.4 billion data privacy settlement with Texas as the main driver. The settlement marks the highest payout ever recorded in a state attorney general's enforcement of privacy laws, while the company still faces antitrust breakup pressure from the U.S. Department of Justice.
At a Glance
- Alphabet's total operating expenses rose 20% year-over-year in the second quarter to $26.1 billion, driven primarily by legal costs, Chief Financial Officer Anat Ashkenazi said on Wednesday.
- Texas Attorney General Ken Paxton announced in May that he had reached a $1.4 billion settlement with Alphabet over data privacy allegations.
- "The biggest driver of the increase in operating expenses was costs related to legal and other matters, reflecting a $1.4 billion charge associated with the principled resolution of certain legal matters," Ashkenazi said on Wednesday's earnings call.
In-Depth Analysis
In recent years, government litigation in areas such as data privacy and antitrust has become an increasingly thorny challenge for big tech companies and their finance chiefs.
Paxton sued Alphabet's Google in 2022, accusing the tech giant of illegally tracking and collecting users' private data, including location, incognito searches, and biometric information.
In a press release announcing the $1.4 billion settlement in May, Paxton's office said the amount was the highest recovery obtained by state attorneys general from Google under state privacy laws.
Meanwhile, the U.S. Department of Justice is pushing to break up Google as part of a major antitrust case.
The lawsuit dates back to late 2020, when the first Trump administration and several states sued Google, accusing it of violating the Sherman Act by monopolizing the search and search advertising markets.