Is ‘data as property’ the new threat to big tech? Inside a rising legal revolution

A California jury’s $314.6 million verdict against Alphabet Inc (NASDAQ: GOOGL) over Android’s background data usage is no longer an isolated legal skirmish—it’s a signal that a broader transformation is underway in how U.S. courts view user data. The July 2025 ruling, which treated mobile data consumption as tangible property owned by consumers, could accelerate the emergence of a new legal doctrine: data as property. For technology companies built on implicit data collection, this trend presents not only litigation risk but also structural threats to how platforms operate, monetize, and communicate with users.

The legal argument that data consumption—especially in passive or undisclosed forms—can constitute “conversion” under tort law is gaining judicial traction. If this framing continues to be accepted, digital platforms may face a redefinition of liability exposure, moving from abstract privacy concerns into enforceable claims of property theft.

What does the Google Android verdict reveal about the rise of data-as-property legal theory in the United States?

In the class-action lawsuit decided in California, plaintiffs argued that Alphabet Inc exploited mobile users’ paid cellular data by transmitting information from idle Android devices without proper consent. The jury found that these background data flows amounted to unauthorized use of a tangible resource—data bandwidth—that users had purchased. The court accepted that such use could be treated as a tortious “conversion,” establishing a new precedent where digital activity intersects with property law.

Legal scholars point out that this verdict could redefine the baseline for what constitutes harm in data collection. Instead of focusing solely on privacy violations or emotional distress, plaintiffs can now argue economic loss based on the misuse of a paid-for resource.

How did courts come to define cellular data as user property—and why does this matter for tech companies?

Historically, U.S. courts treated data within the realm of privacy, contracts, or intellectual property. But the California jury treated cellular data allowances as a finite, user-owned asset—similar to electricity or water. This shift opens the door to more actionable claims, especially when platforms use that asset for their own benefit, as plaintiffs claimed Alphabet Inc did to support targeted advertising infrastructure.

This framing is gaining traction beyond courts as well. Updates to the Uniform Commercial Code now recognize “controllable electronic records,” a signal that lawmakers, too, are beginning to treat digital goods as transferable and ownable property. Such shifts place data-related liability closer to traditional theft or misuse of tangible goods.

Could passive data transmission practices trigger broader legal risks beyond Alphabet and Android?

Institutional stakeholders are increasingly concerned that this ruling could be replicated in other contexts where passive or “background” data transfers occur without explicit consent. This includes preinstalled applications, auto-syncing features, telemetry systems, and even system-level services like crash reporting.

Platforms that assume default background access to user data—without granular, opt-in permissions—may now be vulnerable to copycat lawsuits. Mobile OS developers, advertising SDK providers, and even telecom operators could face scrutiny over whether their data flows constitute a “taking” of user resources.

How are courts, regulators, and lawmakers interpreting digital data in the context of property law?

Multiple state courts and federal appellate bodies are beginning to adopt interpretations that blur the line between intangible data and tangible property. In Taylor v. Google, the U.S. Ninth Circuit declined to dismiss a similar conversion claim, signaling willingness to let juries decide whether background data use constitutes a civil wrong.

Meanwhile, state attorneys general are pursuing increasingly large settlements based on biometric, location, and passive data use. Alphabet Inc, for instance, paid $1.37 billion to the State of Texas earlier in 2025 to resolve claims related to unauthorized location tracking and Incognito mode practices.

The legislative environment is also evolving. The Uniform Commercial Code’s recent amendments offer a legal scaffold for treating some digital records as property—a move that privacy advocates believe could bolster user control in civil disputes.

What role will appellate courts and future federal trials play in shaping data-as-property precedent?

The upcoming federal trial scheduled for April 2026—covering Android users across 49 U.S. states—may prove to be the inflection point. If another jury validates the same “conversion” theory and awards comparable or larger damages, the data-as-property framing could move from novel argument to dominant litigation strategy.

Alphabet Inc has already announced plans to appeal the California verdict, arguing that users agreed to background data transfers via terms of service and system settings. The company insists that these transfers support device security and core functionality. However, if higher courts reject these defenses and uphold the lower court’s reasoning, the implications for every tech firm operating on background data models could be profound.

How are investors and institutional stakeholders reacting to growing litigation exposure tied to user data?

Alphabet Inc’s market capitalization—currently near $1.87 trillion—has cushioned the financial impact of the $314.6 million ruling. However, institutional investors are increasingly factoring in litigation risk and compliance costs. Analysts expect Alphabet to absorb near-term legal exposure, but many foresee incremental margin compression if Android must be reengineered to offer enhanced transparency and opt-in models.

Investors are also monitoring whether peer companies like Meta Platforms, Apple, Microsoft, and Amazon may face similar claims. Passive data collection—from telemetry in Windows to location pings in mobile apps—could become a target-rich environment for class-action lawsuits if courts continue to affirm property-based claims.

What reforms or product design shifts might follow if data is treated as legally owned by the user?

If courts continue to validate this framework, product teams may need to build user interfaces that provide real-time disclosures and actionable consent pathways for all non-essential data usage. Engineers could be asked to segment background traffic into system-critical and non-critical streams, enabling users to opt out of the latter without compromising device performance.

In addition, audit trails and system logs that demonstrate consent history and traffic classification could become standard, not just for compliance audits but for legal defense. Companies will likely invest more in legal engineering, privacy UX design, and internal enforcement of data minimization principles.

Could this emerging legal doctrine reshape the business models of adtech, mobile apps, and cloud platforms?

Yes. If data collected in passive or dormant device states is deemed property, then the entire foundation of data-driven monetization—built on seamless, invisible capture—could be called into question. Advertising networks, SDK developers, and cloud platforms that optimize for always-on data sync may need to prioritize user agency over network efficiency.

From a business model perspective, this could favor platforms that monetize directly through subscriptions or usage-based billing, rather than through behavioral profiling and ad targeting. Companies that cannot clearly separate operational data from monetization data may face growing legal exposure.

How could the data-as-property legal shift reshape platform compliance, engineering, and litigation strategies?

The data-as-property legal framework is no longer theoretical. The California ruling, combined with evolving judicial interpretations, legislative cues, and growing class-action appetite, suggests that the next wave of digital rights litigation will hinge on ownership—not just privacy.

If Alphabet Inc’s appeal fails and the 2026 federal trial results in a similar outcome, the industry could face a cascade of structural changes. These include redesigned mobile operating systems, new data consent models, updated financial disclosures for litigation exposure, and increased R&D spending to ensure compliance. While large firms like Alphabet can absorb these costs, smaller players and startups may struggle to keep pace with evolving expectations.

For investors, platform builders, and regulators alike, the question is no longer whether data is property—but how soon that view will reshape everything from engineering decisions to revenue strategies.