July 10, 2012

Google To Pay Largest FTC Fine Ever For iPhone Tracking

Michael Harper for - Your Universe Online

Earlier this year, the Wall Street Journal published a piece called “Google´s iPhone Tracking.” In it, the Journal discussed how Google, as well as other advertisers, had bypassed the privacy settings on millions of iPhones, all without the user´s permission or knowledge. Today, the Journal is reporting that Google and the FTC are nearing a deal to settle charges related to this specific privacy scandal. According to the Journal, Google will pay $22.5 million, the largest fine ever issued by the FTC. It´s likely Google is being used as an example as the FTC steps up their commitment to enforce online privacy regulations.

Though $22.5 million could crush smaller companies, this fine is not much more than a slap on the wrist of the world´s largest online search provider. As pointed out in the Journal, Google earned $22.5 million every 5 hours last year. By itself, the fine doesn´t do much damage to Google. Having to deal with another privacy scandal publicly, however, could give users pause when using their services.

This specific scandal in Google´s long line of privacy violations concerns a circumvention of Apple´s privacy measures in their mobile web browser, Safari. Even if an iPad and iPhone user had disabled third-party cookies (used to track a user´s actions on the web) Google´s code would trick the browser into letting it track the user. Noticing the violation, the Journal contacted Google when they broke the story in February. Google disabled the code shortly thereafter.

This tricky code was in stark contradiction to early promises from Google that iPad and iPhone users could easily disable tracking in Safari´s privacy settings. In a statement, Google has said, "The FTC is focused on a 2009 help center page.“¦We have now changed that page and taken steps to remove the ad cookies.”

A spokesperson for the FTC declined to comment on the Journal´s story.

After the Wall Street Journal reported on Google´s shady practices, the FTC decided to investigate Google´s action to discover if these practices violated a 20-year decree signed with the FTC in October. In the decree, the search giant promised they wouldn´t misrepresent their privacy practices to their customers. If Google is found to be in violation of this decree, the FTC would fine them $16,000 per violation per day.

Now, the FTC and Google have reached a proposed settlement and fine, according to “several people close to the investigation.” Before it becomes official, the $22.5 million settlement must be approved by FTC commissioners.

In 2010, FTC Chairman Jon Leibowitz launched a privacy initiative, hosting a number of meetings with various advocacy groups and industry representatives. Afterwards, the FTC announced a preliminary set of privacy recommendations that it asked those in the industry to adhere to. One of these features, Do Not Track, gives users the ability to hide their activities online from third-parties and advertisers.

As a part of this stepped up enforcement, the FTC has charged Facebook, MySpace and Twitter for data-security violations, though none of these charges have carried any fines. Instead, the companies in question have also signed 20-year decrees, promising to adhere to the FTC´s regulations concerning online privacy.

While this case deals with users of Apple´s products, those who use Microsoft´s Internet Explorer were also taken advantage of by Google´s shady code. However, when Google was first confronted with this issue, they blamed Microsoft for using out-of-date security mechanisms.