- within Insolvency/Bankruptcy/Re-Structuring, Government and Public Sector topic(s)
Summary
Los Angeles County has entered into its first pre-litigation settlement related to website privacy with two large retailers over alleged pixel tracking tied to allegedly sensitive health-related purchases—and, in doing so, secured sweeping injunctive and monetary relief under California’s Unfair Competition Law and False Advertising Law. The case signals a potential new wave of county-level privacy enforcement that could expand retailers’ exposure well beyond that posed by class actions and state regulators.
On August 3, 2026, Los Angeles County Counsel reached a pre-litigation settlement with retail giants Walmart, Inc., and Sam’s Club, Inc., in a first-of-its-kind enforcement action related to website pixel tracking (Case No. TC26-E968015901). This marks the first website privacy-related complaint brought by county-level counsel (rather than the California Attorney General) and one of only a handful of lawsuits the Los Angeles County Counsel’s Office has filed this year.
The complaint, filed on behalf of the People of the State of California, alleges that the defendants used Meta Pixel and Google tracking code to track consumers’ health-related purchases—including emergency contraceptives, HIV testing kits, illicit drug testing kits, and prenatal vitamins (collectively, “Covered Products”). According to the complaint, these tracking pixels transmitted Covered Product purchase data, along with personal identifiers, to Meta and Google without consumer knowledge or consent.
The People brought two causes of action under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL), each of which provides $2,500 in statutory penalties per violation. In support, the complaint alleges that defendants violated the California Invasion of Privacy Act (CIPA), California Penal Code § 631, by “aid[ing], agree[ing] with, or conspir[ing] with Meta and Google” to intercept consumers’ communications in transit. Additionally, the People allege that the defendants’ own privacy policies—which promised “appropriate, reasonable, and industry-standard security practices”—created a reasonable expectation of privacy, making the undisclosed pixel transmissions an invasion of Californians’ constitutional right to privacy under Article I, Section 1 of the California Constitution.
The settlement, filed the same day as the complaint, permanently enjoins the defendants from: (a) using online tracking technologies on their websites to capture and transmit certain covered information to third parties, and (b) making untrue or misleading statements regarding their use of online tracking technologies. Defendants also agreed to pay $908,817, including $388,817 in restitution to be distributed to consumers who submit valid claims.
What This Could Mean for Retail Clients. The legal theories here are not new—but the enforcement posture is. While the Attorney General has brought several enforcement actions in recent years (11 since the California Consumer Privacy Act’s 2023 amendment), county-level (and potentially city-level) government actions create a new layer of exposure. In recent comments concerning the settlement, the County noted an increased focus on protecting consumer privacy, indicating that more actions may soon be on the way. Indeed, the fact that a regulator is enforcing website privacy claims at the county level under the UCL and the FAL—when the California Consumer Privacy Act created a state-level enforcement mechanism and dedicated enforcement agency—underscores how appealing this topic is to regulators and litigants alike, and how many tools they have in their toolkit.
Even though the civil penalties that served as the basis of the settlement are exclusively available for regulatory enforcement actions, private litigants frequently assert UCL claims in the CIPA context in an attempt to seek equitable relief, such as restitution or disgorgement of profits. We therefore expect private litigants to attempt to use this complaint and settlement as further support for their claims under these theories. Retailers selling health, wellness, or reproductive products face the sharpest risk, but any retailer transmitting consumer purchase or browsing data to advertising platforms through tracking pixels should take note: plaintiffs will argue the settlement legitimizes the UCL and FAL as vehicles for privacy claims.
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