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By Christopher Williams, Technology, Media and Telecoms Editor

The company is facing a landmark group legal action by Britons angry over the way it circumvented settings on the iPhone to track their web usage. Google has already been fined a record $22.5m (£14.4m) by authorities in the United States over the practice. 

In a submission to the High Court, however, Google has argued that as an American company it is not covered by British privacy laws. It said there was “no jurisdiction” for the case to be heard here because its consumer services are provided by Google Inc, based in Silicon Valley, rather than Google UK. 

The move raises questions about the rights of millions of British internet users who rely on Google for basic services such as web search and email. Its rivals, such as Facebook and Microsoft, provide their consumer web services through European subsidiaries so could not make the same jurisdictional argument. 

The claimants said it showed Google’s policies “don’t respect” British privacy laws and compared its stance to its controversial avoidance of UK corporation tax. 

Claimant Marc Bradshaw said: “It seems absurd to suggest that consumers can’t bring a claim against a company which is operating in the UK and is even constructing a $1bn headquarters in London.” 

Judith Vidal-Hall, another claimant, added: “What are they suggesting - that they will force Apple users whose privacy was violated to pay to travel to California to take action when they offer a service in this country on a .co.uk site?” 

They argued that action by the Information Commissioner’s Office, Britain’s data protection watchdog, would be ineffective. It can impose a maximum fine of £500,000, less than 0.002pc of Google’s annual turnover. 

Google was last year found to have circumvented privacy settings in the iPhone web browser software, Safari, by a researcher at Stanford University in California. By default, Apple prevents websites from installing small text files called cookies that allow advertising companies such as Google to track consumers across the web. Google, however, wrote software to work around Apple’s settings. 

The company insisted that it did not use the cookies to collect personal data, but the Federal Trade Commission issued a record fine and said that “all companies must... keep their privacy promises to consumers, or they will end up paying many times what it would have cost to comply in the first place”. 

Google’s application to dismiss the British case is due to be heard in October.