August 9, 2012

It’s Official: Google To Pay $22.5 Million To The FTC

Michael Harper for - Your Universe Online

Earlier this year, the Wall Street Journal broke the news that Google had been bypassing some security and privacy features on Apple´s iPhone which allowed the tracking of third party cookies. The trouble with this, of course, was that even if an iPhone user went out of their way to turn off these third party cookies, Google made sure to track them regardless.

Today, it´s been announced that Google has agreed to pay a record-setting fine to the FTC of $22.5 million as a result of this action.

The FTC had reached this conclusion in July, though it has only today been agreed upon by the FTC commission and Google, making this the largest fine ever handed down by the government agency and the first fine to come as a result of a violation of Internet Privacy.

According to the Wall Street Journal, Google continued to deny these allegations throughout the settlement, causing Commissioner J Thomas Rosch to vote against this agreement. According to Rosch, this settlement isn´t "in the public interest when it contains a denial of liability.” Despite his disagreement with this settlement, the fine was passed 4-1. Other commissioners argued that this case was quite relevant to the public, saying this fine is a sign that Google admits to their alleged wrongdoing.

Though the agency has never handed down such a heavy fine before, it´s seen as little more than a slap on the wrist for a company such as Google, who netted $37.8 billion last year. In fact, the Mountain View search giant was able to pull in $22.5 million every 5 hours last year. Regardless, the FTC holds that this fine is meant to make an example of Google rather than cripple them.

"With a company of Google's size, almost any penalty can be dismissed as insufficient," wrote the commissioners today in a statement.

“All companies must abide by FTC orders against them and 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.”

The FTC was only able to hand down this fine to Google because the search company had earlier reached an agreement with the American agency, called a consent decree, last October. In this separate settlement, regarding a different alleged privacy breach, Google had promised not to misrepresent their privacy polices to their customers. As per this agreement, Google said they would pay $16,000 per violation per day.

“We set the highest standards of privacy and security for our users,” replied Google in a statement to Bloomberg.

“The FTC is focused on a 2009 help center page published more than two years before our consent decree, and a year before Apple changed its cookie-handling policy. We have now changed that page and taken steps to remove the ad cookies, which collected no personal information, from Apple´s browsers.”

The FTC has also ordered Google to disable their tracking cookies as a part of the agreement. Though most of these tracking cookies have been disabled, per Google´s statements, the company should have them all completely disabled and removed by February 2014.

When the cookies were first discovered by a Stanford researcher, Jonathan Mayer, in February, (a report from the Wall Street Journal was soon to follow) Google said they “didn´t anticipate this would happen” and vowed to remove the files. The FTC had already been investigating these claims, however, when these reports first went public.