Google on Monday agreed to pay $392 million and settle a landmark privacy case with 40 US states over accusations that the search engine giant misled users into believing location tracking had been switched off on their devices.

A statement highlighted that it was the largest multi-state privacy settlement by state authorities in US history and included a binding commitment for improved disclosures by Google.

"Digital platforms like Google cannot claim to provide privacy controls to users then turn around and disregard those controls to collect and sell data to advertisers against users' express wishes -- and at great profit," stressed New Jersey Attorney General, Matthew Platkin, in the statement.

The rare joint lawsuit by 40 states grew from impatience over the failure of federal authorities to take strong action against big tech amid legislative gridlock in Washington.

Republican and Democratic lawmakers disagree on what national rules on online privacy should look like, with furious lobbying by tech companies to limit their potential impact.

Since 2018, the US tech giants have faced strict rules in Europe, with Google, Amazon, and others subjected to huge fines over privacy violations.

The US case began after the Associated Press reported in 2018 that Google tracked users even when they had turned off the option.

The states involved in the lawsuit included Arkansas, Florida, Illinois, Louisiana, North Carolina, Pennsylvania, and Tennessee.

In a statement, Google claimed that the allegations were based on product features that were no longer up to date.

"Consistent with improvements we've made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago," the company said.

Under the settlement, Google will provide more detailed information on tracking activity.

In mid-October, Texas sued the company over claims that the search-engine giant is illegally capturing the biometric data of users without their consent.

Texas, in addition to a few other states, has a biometric privacy law prohibiting the gathering of biometric information for commercial purposes without consent.

Read more: Google fined $40M for misleading location tracking settings on Android