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FTC Likely to Examine Google’s Wireless Gaffe

By + Thomas Catan, THE WALL STREET JOURNAL

Tue, May 18, 2010 at 11:35 am

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The U.S. Federal Trade Commission is likely to open a preliminary inquiry into Google Inc.’s disclosure that it accidentally harvested data from unsecured wireless networks for several years, several people familiar with the matter said.

The process is at an embryonic stage and whether the FTC has begun gathering information from other parties about the incident remains unclear. Any resulting investigation wouldn’t necessarily lead to action. But if the FTC decides to pursue, it would be the latest federal inquiry to examine the Internet search giant’s behavior.

The FTC’s Bureau of Competition is currently deciding whether to challenge Google’s proposed $750 million takeover of mobile advertising company AdMob Inc. At the same time, the FTC’s consumer protection arm is conducting a wide-ranging review of the ways in which online companies collect and employ data about their users’ online behavior.

In this case, the Bureau of Consumer Protection is the most likely part of the FTC to be tasked with investigating whether the behavior detailed in Google’s latest admission broke any laws.

An FTC spokeswoman declined to comment. A Google spokeswoman also declined to comment beyond the company’s blog post Friday.

In it, the company said it had discovered that the roving cars it uses to create its online mapping services were inadvertently gathering data from people’s web use over “Wi-Fi” networks without passwords.

Google said it was “reaching out to regulators in the relevant countries about how to quickly dispose” of the data the company had collected. The post also said that Google would ask a third-party to review the software and what data it gathered.

On Monday, Google updated its blog post saying it had started to erase some of the data it said it had inadvertently collected in Ireland after the Irish Data Protection Authority requested it do so. If the FTC opens a formal investigation, some legal experts said they would probably ask that Google preserve the relevant data.

Consumer advocacy group Consumer Watchdog said Monday it was sending the FTC a letter urging the agency to investigate the mishap. John Simpson, the group’s consumer advocate, said he was concerned that Google’s promise to get third-parties to review the software in question was insufficient.

Other privacy advocates said it was unclear whether the FTC was the correct agency to review the matter and that they would wait to see how European authorities—who have been scrutinizing Google’s collection of Wi-Fi information for months—reacted before deciding whether to petition U.S. regulators to intervene.

Write to Thomas Catan at thomas.catan@wsj.com and Jessica E. Vascellaro at jessica.vascellaro@wsj.com

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