Tuesday, September 23, 2014
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Google to pay $22.5 million penalty; still denies being evil

Google agreed to pay $22.5 million, a record penalty from the FTC but a pittance for the multibillion-dollar behemoth, for fibbing to users of Apple's Safari browser.

Google to pay $22.5 million penalty; still denies being evil

Google will pay $22.5 million, a record penalty from the FTC but a pittance for the multibillion-dollar tech giant, for fibbing to users of Apple´s Safari browser.
Google will pay $22.5 million, a record penalty from the FTC but a pittance for the multibillion-dollar tech giant, for fibbing to users of Apple's Safari browser.

Google has agreed to pay $22.5 million, a record penalty from the Federal Trade Commission for violating previous promises but a pittance for the multibillion-dollar search behemoth, for fibbing to users of Apple's Safari browser about its online-tracking practices.

But the deal allowed Google - whose informal motto is "Don't be evil" - to deny that it did anything wrong, which was enough to cause one FTC commissioner, J. Thomas Rosch, to dissent.

What did Google do to stir the FTC's (mild) anger? The agency's announcement explains:

Google, the developer of the world’s most popular Internet search engine, generates billions of dollars in revenues annually from selling online advertising services, including the delivery of targeted ads online. Cookies are small pieces of computer text that are used to collect information from computers and can be used to serve targeted ads to consumers. By placing a tracking cookie on a user’s computer, an advertising network can collect information about the user’s web-browsing activities and use that information to serve online ads targeted to the user’s interests or for other purposes.

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...  For several months in 2011 and 2012, Google placed a certain advertising tracking cookie on the computers of Safari users who visited sites within Google’s DoubleClick advertising network, although Google had previously told these users they would automatically be opted out of such tracking, as a result of the default settings of the Safari browser used in Macs, iPhones and iPads.

The FTC's complaint says: "Google represented to Safari users that, if they did not change the default setting, Google would not place DoubleClick Advertising Cookies on a user’s browser, collect interest category information from or about the user, or serve targeted advertisements to the user. ... Despite its representations to Safari users, Google overrode the Safari default browser setting and placed the DoubleClick Advertising Cookie on Safari browsers."

The FTC may be doing what it can to solve problems and avoid costly litigation, but it's mostly nibbling around the edges of practices that make a mockery of consumers' privacy expectations. Only the most concerned Web users pay attention to these privacy settings, and Google's violations undermined even their efforts.

That $22.5 million penalty? The complaint says it equals less than one-thousandth of Google's $36.5 billion take last year from advertising fees - 96 percent of its total revenue.

What does Google say? According to CNET:

Google said that it takes privacy very seriously, and has set in motion removing the advertising cookies.  "We set the highest standards of privacy and security for our users," a Google spokesman said in an e-mailed statement. "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."

Jeff Gelles Inquirer Business Columnist
About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
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