• by Wendy Davis  @wendyndavis, November 29, 2016

Google has agreed to settle a lawsuit alleging that the company violates people's privacy by scanning Gmail messages for ad-targeting purposes, according to court papers filed Monday.

If accepted by U.S. District Court Judge Lucy Koh in the Northern District of California, the deal will resolve a class-action complaint brought on behalf of people who don't themselves have Gmail accounts, but communicate with Gmail users. Details of the settlement haven't yet been disclosed.

The settlement stems from a complaint filed in September 2015 by San Francisco resident Daniel Matera. He alleged that Google violates a California privacy law and the federal wiretap law by intercepting messages without people's consent.

Google's terms of service currently disclose that it analyzes the contents of email messages for features including "tailored advertising." But Matera alleged that he didn't have a Gmail account, and therefore never agreed to those terms. He argued in his initial complaint that he was forced to communicate with Gmail users due to the "ubiquity of Gmail, and the fact that tens if not hundreds of millions of Gmail accounts are presently in existence."

News of the settlement comes several months after Koh rejected Google's bid to dismiss the lawsuit. The company argued that scanning emails for ad purposes isn't covered by the wiretapping law. That statute prohibits companies from "intercepting" electronic communications without people's consent, but has an exception for interceptions in the ordinary course of business.

Google contended that the email scans were made in the ordinary course of business, but Koh disagreed. She ruled in August that the scans would only have been made in the ordinary course of business if Google had to perform them in order to provide email. "Google is able to provide the Gmail service to at least some users without intercepting, scanning, and analyzing the content of email for advertising purposes," she wrote, referencing the company's 2014 move to stop scanning emails sent through its education apps. "This strongly suggests that the alleged interception, scanning, and analysis of email neither facilitates nor is incidental to the provision of Google’s electronic communication service."

Earlier this year, Yahoo settled a similar lawsuit by agreeing to add new language to its privacy policy. That settlement also required Yahoo to implement some technical changes to its email scanning procedures, but didn't require the company to stop scanning messages or surrounding them with ads. That agreement also didn't require Yahoo to pay monetary damages to Web users whose privacy allegedly was violated, but provided for payments of up to $4 million to the attorneys who brought the case.

Lawyer for Matera are expected to file papers outlining the settlement terms by December 28.