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Monday, May 07, 2012

Google In A Pinch Again

Story first appeared in Bloomberg Businessweek.
Google Inc. is negotiating with the U.S. Federal Trade Commission over how big a fine it will have to pay for its breach of Apple Inc.’s Safari Internet browser.

The fine could amount to more than $10 million dollars. The fine would be the first by the FTC for a violation of Internet privacy as the agency steps up enforcement of consumers’ online rights.

The FTC is preparing to allege that Mountain View, California-based Google deceived consumers and violated terms of a consent decree signed with the commission last year when it planted so-called cookies on Safari, bypassing Apple software’s privacy settings. Google states that they will cooperate with any officials who have questions.

The cookies allowed Google to bypass Safari’s built-in privacy protections to aim targeted advertising at users of Safari on computers, laptops, iPhones and iPads. Google said at the time that it didn’t anticipate this would happen and that it was removing the files since discovering the slip.

The Safari breach was first identified by a Stanford researcher, who published a blog entry on his discoveries Feb. 16. ‘Unfair and Deceptive’

The FTC is charged with protecting consumers against “unfair and deceptive” practices under the law that created the agency. European regulators are probing Google more broadly on its privacy policy and sent a detailed questionnaire to the company in March.

Google signed a consent decree with the FTC last year in which it settled allegations it used deceptive tactics and violated its own privacy policies in introducing the Buzz social-networking service in 2010. The 20-year settlement bars Google from misrepresenting how it handles user information, and requires the company to follow policies that protect consumer data in new products and to submit to regular privacy audits.

The FTC has the authority to levy fines for violations of its consent decrees of as much as $16,000 a day for each violation.

First-Quarter Revenue

Google, the world’s largest Internet search company, on April 12 reported first-quarter revenue of $8.14 billion, excluding sales passed on to partner sites. Profit before certain costs was $10.08 a share.

The agency issued its largest fine in a privacy-related case against data broker ChoicePoint Inc. in 2006 for compromises of personal financial records of more than 163,000 consumers. ChoicePoint agreed to pay $10 million in civil penalties and $5 million in consumer redress in a settlement with the FTC.

Google is quickly becoming the privacy problem child for regulators in the U.S. and Europe. The Center for Digital Democracy has urged regulators to review the handling of consumer data by companies including Google, Facebook Inc. and Top SEO Companies. The Commission’s work to enforce its consent decree with Google shows there’s a real regulatory cop on the digital beat.

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