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FTC Estimates Google’s Privacy Hack Earned Up To $4 million

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Mon, Oct 1, 2012 at 4:58 pm

    FTC Estimates Google’s Privacy Hack Earned Up To $4 million

    One of the things you hear when companies try to minimize the impact of privacy violations is an attempt to claim there was no financial harm to consumers. However, in an interesting development the Federal Trade Commission is now publicly estimating that Google’s hack around Apple’s Safari browser privacy settings earned the Internet giant up to $4 million.

    The estimate came in the FTC’s response to Consumer Watchdog’s amicus curiae brief opposing the proposed $22.5 million settlement with Google for the violation. We argued that the settlement is deficient because: 1. It includes no permanent injunction precluding Google from violating the “Buzz” Consent Decree; 2. The $22.5 million civil penalty is inadequate; and 3. The proposed deal specifically allows Google to deny it did anything wrong.

    Booth Google and the FTC filed their responses late Friday. Frankly, they both claimed about what I expected they would say: that the deal was reached after arms-length negotiations; that it was fair, reasonable and in the public interest; and

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    that decisions by an executive branch agency deserve considerable deference from a court.

    We’ll have to wait see what Judge Susan

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    Illston thinks of all the arguments. What’s next in the case is up to her.

    Meanwhile, the interesting new nugget in the FTC’s filing was the estimate of what Google earned by violating our privacy. Megan Bartley, an attorney in the FTC’s Division of Enforcement in the Bureau of Consumer Protection said in a declaration filed as Exhibit A with the FTC response brief: “Using a variety of sources, the FTC estimated that Google profited no more than $4 million from the alleged violation.”

    I’ve maintained that the fine is mere pocket change to Google executives. Indeed, the value of the company’s outstanding stock climbed more than $22.5 million the day the proposed settlement deal was announced. The FTC doesn’t want to us to compare the fine to Google’s $40 billion in annual revenue, but rather what Google derived by playing fast and loose with our privacy.

    It’s good to see the FTC cite the $4 million figure if that was a basis for the fine. What’s missing, though, is what sources and methods the agency used to make the estimate.

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