Alphabet's Google will pay US$391.5 million to settle allegations by 40 states that the search and advertising giant illegally tracked users' locations, the Michigan attorney general's office said Monday.

The investigation and settlement, which was led by Oregon and Nebraska, is a sign of mounting legal headaches for the tech giant from state attorneys general who have aggressively targeted the firm's user tracking practices in recent months.

In addition to the payment, Google must be more transparent with consumers about when location tracking is occurring and give users detailed information about location-tracking data on a special web page, the Iowa attorney general's office said.

"When consumers make the decision to not share location data on their devices, they should be able to trust that a company will no longer track their every move," Iowa Attorney General Tom Miller said in a statement. "This settlement makes it clear that companies must be transparent in how they track customers and abide by state and federal privacy laws."

Arizona filed a similar case against Google and settled it for US$85 million in October 2022.

Texas, Indiana, Washington State and the District of Columbia sued Google in January over what they called deceptive location-tracking practices that invade users’ privacy.

Google spokesperson Jose Castaneda said: "Consistent with improvements we've made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago."

Google had revenue of US$111 billion from advertising in the first half of this year, more than any other seller of online ads. A consumer's location is key to helping an advertiser cut through the digital clutter to make the ad more relevant and grab the consumer's attention. (Reuters)