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Consumer Watchdog Asks Judge for Permission to Oppose FTC Settlement With Google

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Wed, Aug 22, 2012 at 11:03 am

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Consumer Watchdog Asks Judge for Permission to Oppose FTC Settlement With Google

Cites Need For Google to Accept Responsibility For Wrongdoing

SAN FRANCISCO – Consumer Watchdog has filed a motion in U.S. District Court asking that it be allowed to oppose the $22.5 million settlement the Federal Trade Commission has reached with Google because the agreement allows the Internet giant to deny any wrongdoing.

Gary Reback and Robert J. Yorio, of the law firm Carr & Ferrell, filed the motion in U.S. District Court in San Francisco on behalf of the nonprofit, nonpartisan public interest group.

Consumer Watchdog said Wednesday that the settlement is inadequate because it allows Google to deny that it violated an earlier privacy consent agreement. The FTC has charged that Google violated the “Buzz Consent Agreement” when Google claimed

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it was honoring privacy settings on iPads, iPhones and other devices using the Safari browser when in fact it was circumventing them.

“The Commission is proposing to let Google to buy its way out of trouble for an amount that is less than the company spends on lunches for its employees and with no admission it did anything wrong,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “Corporations need to be held accountable when they willfully violate a consent agreement.”

The motion asks Judge Susan Illston to grant Consumer Watchdog friend-of-the-court status and allow the group to submit briefs opposing the settlement. The motion also asks for a hearing on the proposed deal and asks that Consumer Watchdog be allowed to appear at the hearing.

Read Consumer Watchdog’s motion here:

The motion notes that Commissioner J. Thomas Rosch dissented from the agreement because the proposed settlement allows Google to deny any violation of its “Buzz Consent Agreement.” He further argued that the proposed $22.5 million civil penalty does not justify the denial of liability because it is such a small amount of Google’s profit or revenues.

In making the motion to be granted amicus curiae status Consumer Watchdog’s brief said:

“The question of whether federal courts should accept consent settlements between government agencies and private companies in which the companies continue to deny liability is currently an issue in two other prominent pieces of litigation. Last year District Court Judge Rakoff of the Southern District of New York rejected a proposed stipulated order between the SEC and Citigroup because the record did not contain either an admission or denial of the allegations underlying the complaint. SEC v. Citigroup Global Mkts. Inc., 827 F. Supp. 2d 328 (S.D.N.Y. 2011). The Second Circuit subsequently stayed proceedings in Judge Rakoff’s court while it considers the parties’ appeal. (United States SEC v. Citigroup Global Mkts., Inc., 673 F.3d 158 (2d Cir. 2012)).”

“The FTC is also involved in a similar case. In FTC v. Circa Direct LLC, 2012 U.S. Dist. LEXIS 81878 (D.N.J. June 13, 2012), the district court has twice required the Commission to submit briefing on whether the FTC’s failure to obtain an admission of liability implicates the court’s public interest analysis.”

“The parties’ submissions here do not even acknowledge the controversy regarding the FTC’s action, much less direct this Court to the other matters in litigation. More importantly, however those other cases are resolved, the record here is unique in that the FTC is attempting to settle allegations of Google’s violation of an earlier Commission order without any acknowledgement liability. ‘In other words,’ wrote Commissioner Rosch, ‘the Commission charges Google with contempt,’ making its acceptance of Google’s denial of liability ‘all the more inexplicable.’”

“In the Circa Direct case, the FTC acknowledged that the appropriate standard of review in a case like this is whether the proposed settlement is ‘fair, adequate, reasonable, and in the public interest.’ Consumer Watchdog respectfully submits that it can aid this Court in making the appropriate evaluation.”

Consumer Watchdog had filed a complaint in February about Google violating the “Buzz Consent Agreement” with the FTC after it was revealed how Google was circumventing privacy settings on Apple’s Safari browser.

“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

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were still effective,” said Simpson. “Clearly it violated its agreement with the FTC.”

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Visit Consumer Watchdog’s website at — Carr & Ferrell’s website is

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This post was written by:

John M. Simpson

- who has written 361 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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