This posting was written by John W. Arden.
Google, Inc. has agreed to pay a $22.5 million civil penalty to settle Federal Trade Commission misrepresentation charges concerning its promise not to place tracking “cookies” on the computers of users of Apple Inc.’s Safari Internet browser and not to direct targeted ads to those users, the FTC announced today.
The Commission charged Google with violating an October 2011 settlement, in which the company agreed not to misrepresent the extent that it protected the privacy and confidentiality of any information it collected from those visiting Google and partner websites and the extent to which consumers may exercise control over the collection, use, or disclosure of such information.
According to the FTC complaint, Google informed Safari Internet browser users that they did not need to take any action to be opted out of DoubleClick targeted advertisements and that it would not (1) place DoubleClick Advertising cookies on a user’s browser, (2) collect interest category information about the user, or (3) serve targeted advertisements to the user.
Despite these representations, Google overrode the Safari default browser setting and placed the cookies on Safari browsers, the FTC charged. The initial cookie enabled Google to collect, store, and transmit a user’s Google account ID. After the Safari browser accepted the initial cookie, Google set additional third-party cookies onto the user’s browser, it was alleged. Setting these cookies on users’ Safari browsers enabled Google to collect information and serve targeted advertisements to the users, the FTC said.
Besides making misrepresentations about its information collection and ad targeting practices, Google misrepresented that it adhered to the National Advertising Initiative’s Self-Regulatory Code of Conduct, which required the posting of a notice describing a company’s data collection, transfer, and use practices, the FTC claimed.
The civil penalty to be paid by Google is the largest the agency has ever obtained for a violation of an FTC consent order. In addition to the civil penalty, the consent order required Google to disable all the tracking cookies it said it would not place on consumer computers.
“The record setting penalty in this matter sends a clear message to all companies under an FTC privacy order,” said FTC Chairman Jon Leibowitz. “No matter how big or small, all companies must abide by FTC orders against them and keep their privacy promises to consumers or they will end up paying many times what it would have cost them to comply in the first place.”
The Commission voted 4-1 to authorize the staff to refer the complaint to the Department of Justice and to approve the proposed consent decree. Commissioner J. Thomas Rosch dissented.
In a statement, the Commission said that the settlement was in the public interest because there was strong reason to believe that Google violated the October 2011 consent order and the $22.5 million fine was an appropriate remedy. In his dissenting statement, Commissioner Rosch objected to Google’s denial of liability in the consent decree. Rosch saw “no reason why the more common ‘neither admits nor denies liability’ language would not adequately protect Google from collateral estoppel in [civil] lawsuits.”
The Commission strongly disagreed with the view that if it allowed a defendant to deny the complaint’s substantive allegations that the settlement would not be in the public interest.
The complaint is United States v. Google, Inc., filed yesterday by the Department of Justice in federal district court in San Jose, California. Text of the complaint and the proposed stipulated order appear on the FTC website, along with a news release on the case.
Further information will appear in CCH Trade Regulation Reporter.
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