The Australian Competition and Consumer Commission alleged the tech giant violated consumer law by not properly informing users their personal data could be used to track them across the internet and target ads.
However, the ACCC failed to establish Google contravened consumer law, Justice David Yates told the Federal Court on Friday.
He said those who took the effort to read all of the information Google provided would have been properly informed.
He dismissed the application and ordered the ACCC to pay Google's legal costs.
A notification presented to Google account holders between 2016 and 2018 told users it would make it easier for them to control their data and information and make advertising "more relevant".
The commission contended Google had designed the notification in a way to maximise the number of account holders who consented, rather than maximise the number of users who understood what they were consenting to.
However, Justice Yates was not persuaded Google was acting untowardly by doing so.
"Account holders were given the choice as to whether they should give consent," Justice Yates said.
Further information about the changes was available through links, and Google had to cater to people who were going to skip reading about the changes, those who would skim further information and those who would actually read it.
"Google's appreciation that its account holders comprised 'Skippers, Skimmers and Readers' explains why the notification was presented in a way that provided links to enable account holders to obtain more information in relation to Google's proposal, should that have been their desire," he said.
Despite the time devoted to expert evidence from behavioural scientists at the hearing, Justice Yates found it "strayed far from the case at hand" and was "of very limited assistance".
A Google spokesperson said the company was pleased with the decision, while the commission said it would "carefully consider" the judgment.
"We took this case because we were concerned that Google was not adequately providing consumers with clear and transparent information about how it collects and uses consumer data," ACCC acting chair Delia Rickard said.
