Google pays record amount in FTC settlement

Posted By Matt Williams|08-14-2012

Google comes under fire for unscrupulous privacy practices.

Privacy has been a hot-button issue in the news lately, and government agencies are starting to crack down on companies that go too far. The latest privacy breach comes not from cyber criminals, but from one of the world’s most well-known companies.

Showing that no company – big or small – is above consumer privacy agreements, Google made headlines when it agreed to pay $22.5 million to settle charges issued by the U.S. Federal Trade Commission. According to the FTC, Google violated a privacy settlement when the company placed tracking cookies in Apple’s Safari web browser. The settlement is the largest that the FTC has ever obtained.

In addition to promising it would not deliver targeted ads to Safari users, Google said the default settings for Safari would block third-party cookies, meaning users would not have to take any additional steps to “opt out” of being tracked in this way. However, the FTC claimed Google bypassed the browser’s default cookie-blocking capabilities.

“The record setting penalty in this matter sends a clear message to all companies under an FTC privacy order,” said Jon Leibowitz, chairman of the FTC. “No matter how big or small, 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.”

Google’s deception
Although the recent settlement highlights a disturbing trend in how transparent (or not) companies are in handling user information, it is not the first time the FTC has criticized Google for misleading consumers. Google agreed to develop a comprehensive privacy program after a March 2011 settlement.

The earlier dispute came after Google launched Buzz – a social networking platform offered through Gmail. When Buzz launched, Google’s privacy policy stated the company would ask for consent when using information in a way that differed from the purpose for which it was collected. However, the FTC claimed the company did not follow its own privacy guidelines. The Buzz settlement prevented Google from misrepresenting the privacy of user information or misrepresenting privacy practices. The settlement also dictated the company must gain user consent before sharing information with third parties if it changes any service in a way that would result in information sharing.

“Google launched its Buzz social network through its Gmail web-based email product,” according to the FTC complaint. “Although Google led Gmail users to believe that they could choose whether or not they wanted to join the network, the options for declining or leaving the social network were ineffective. For users who joined the Buzz network, the controls for limiting the sharing of their personal information were confusing and difficult to find.”

More Google investigations
Despite the record-breaking settlement amount, Google may not be entirely in the clear just yet. According to a recent Reuters article, Google may face additional scrutiny from organizations other than the FTC.

“Google also faces potential sanctions from other governments,” the article stated. “It is being investigated by the European Union to determine if the company complies with Europe’s stricter privacy laws.The top search engine provider is also the subject of a wide-ranging antitrust investigation by the FTC and European regulators over accusations that it manipulated search results to favor its own products.”

Do you think the settlement is enough to deter companies from mishandling user information? Do you feel online businesses collect more information than is necessary? Let us know what you think about Google’s privacy practices in the comments!