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FTC’s Expected Record $22.5 Million Fine For Google Praised By Consumer Watchdog

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Tue, Jul 10, 2012 at 1:04 pm

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FTC’s Expected Record $22.5 Million Fine For Google Praised By Consumer Watchdog

Group Complained to Commission After Grad Student Discovered iPads, iPhones Were Hacked

SANTA MNICA, CA – The Federal Trade Commission reportedly plans to fine Google $22.5 million for hacking around privacy settings on iPhones and iPads that use Apple’s Safari browser. Consumer Watchdog praised the Commission today for its expected strong action defending consumer privacy.

Consumer Watchdog had filed a complaint in February with the FTC after Stanford Researcher Jonathan Mayer revealed what Google was doing.

“Google hacked past a key privacy setting on iPhones and iPads and other devices using Apple’s Safari browser, placed tracking cookies on them and then lied, saying the settings were still effective,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “I am delighted the FTC appears ready to take strong action against an obvious violation of Google’s promises to honor users’ privacy in its ‘Buzz’ Consent Decree with the Commission.”

The fine was expected to be the largest penalty ever imposed on a single company by the Commission. Under terms of the consent decree the FTC could fine Google up to $16,000 per violation per day.

“The size of the fine is apparently a record for the FTC and in that context sends a strong message about the seriousness of Google’s wanton and egregious privacy violation,” said Simpson. “Nonetheless, it’s a drop in the bucket for Google.  It would have been better to base the fine on a substantial percentage of the company’s annual revenue, which was $40 billion last year. Google should feel real pain for its wanton violation.”

Read Consumer Watchdog’s complaint to the FTC here: http://www.consumerwatchdog.org/resources/ltrleibowitz021712.pdf

A study released Feb. 17 by Jonathan Mayer of Stanford University’s Security Lab, and the Center for Internet and Society, found that Google was circumventing a privacy setting in Apple’s Safari web browser.  Like most web browsers, Safari provides the option not to receive third-party “cookies.”  Cookies are small bits of code placed on the browser and can be used by ad networks to track you as you surf the web. Blocking third-party cookies is supposed to prevent such tracking.

Safari is the primary browser on the iPhone and iPad. It is also the default browser on Apple’s computers.

Read Jonathan Mayer’s study here: http://webpolicy.org/2012/02/17/safari-trackers/

The Stanford study found that three other companies – Vibrant Media Inc., WPP PLC’s Media Innovation Group LLC and Gannett Co.’s PointRoll Inc. — were also circumventing the Safari privacy setting.

It was not clear if the FTC plans action against those companies.  The Wall Street Journal’s Julia Angwin first reported news of the $22.5 million fine today.  Reports in May by Bloomberg News predicted a settlement in excess of $10 million.

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This post was written by:

John M. Simpson

- who has written 351 posts on Inside Google.

John M. Simpson is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

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