The U.S. Federal Trade Commission (FTC) officially announced on Thursday a record fine for Google as punishment for the company’s efforts to bypass Apple’s mobile Safari privacy settings. Google will pay US$22.5 million, a record fine that would break the company if it were leveled 1,915.5 more times before another quarter’s earnings hit the bank.
As of the June quarter, Google had $43.1 billion in cash and short term holdings.
Google is being punished for giving advertisers an API that allowed mobile Safari users’ Web surfing to be tracked even if they had enabled privacy settings that prevent such tracking. Google’s business model is built partially on knowing all the world’s Interwebs content and partially on knowing and understanding how we, the world’s Interwebs users, view, use, and consume that content.
Privacy settings such as the ones Apple added to mobile Safari, as well as walled off sites like Facebook or private twitter accounts prevent Google from gathering that info. The same thing goes for Apple’s very popular iTunes and App Store, and Google Cofounder Sergey Brin said that these things that protect our privacy are a threat to an “open Internet.”
In any event, the FTC has been investigating this issue for months, even though Google did shut down the API when attention was brought to it.
“The record-setting penalty in this matter sends a clear message to all companies under an FTC privacy order,” FTC Chairman Jon Leibowitz said, pretending that $22.5 million matters to a company as profitable as Google. “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 to comply in the first place.”
“Google is paying what we think is a heavy price for violating our prior order,” David Vladeck, director of the FTC’s bureau of competition, said in a statement. “We hope this sends a clear message to Google that violations of the order and failure to keep commitments on privacy is going to be punished severely. This sends the message that the FTC isn’t kidding around.”
Google clearly took the FTC’s lesson to heart, too. In a statement given to Bloomberg, the company said, “We set the highest standards of privacy and security for our users. The FTC is focused on a 2009 help center page published more than two years before our consent decree, and a year before Apple changed its cookie-handling policy. We have now changed that page and taken steps to remove the ad cookies, which collected no personal information, from Apple’s browsers.”
Those are clearly the words of a company that has learned its lesson, and that shouldn’t be surprising. When the news first gained traction that Google had an API that was being used to bypass mobile Safari privacy settings, Google said, “We used known Safari functionality to provide features that signed-in Google users had enabled. It’s important to stress that these advertising cookies do not collect personal information.”
To be fair, Google wasn’t required to admit any wrongdoing as part of the settlement, an omission that caused FTC Commissioner Thomas Rosch to vote against the settlement.
“There is no question in my mind that there is ‘reason to believe’ that Google is in contempt of a prior commission order,” Mr. Rosch wrote in his dissenting opinion. “This scenario — violation of a consent order — makes the commission’s acceptance of Google’s denial of liability all the more inexplicable.”
The settlement announced on Thursday was first leaked in July.
Image made with help from Shutterstock.