Google fined $22.5M for latest privacy breakdown

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The FTC didn’t take action against Google for scooping up the Wi-Fi data, although the Federal Communications Commission fined the company $25,000 earlier this year for impeding its investigation into the matter.

As it did with the secret tracking on Safari, Google has framed those privacy breaches as inadvertent slips.

That defense is wearing thin, according to David Vladeck, the director of the FTC’s bureau of consumer protection.

“In some ways, as a regulator, it’s hard to know which answer is worst: `I didn’t know’ or `I did it deliberately.’ Both are bad,” Vladeck told reporters on a Thursday conference call.

The FTC hopes the fine will force Google to pay better attention to its practices.

“It’s a big company,” Vladeck said. “It’s grown very quickly, but the social contract is if you are going to hold on to people’s most private data, you have got to do a better job of honoring your privacy commitment.”

Those terse remarks underscore Google’s increasingly tense relationship with regulators around the world. Both the FTC and the European Commission are engaged in broad antitrust investigations of Google. The company, which is based in Mountain View, Calif., has submitted a list of concessions in an attempt to settle Europe’s probe, while the FTC’s inquiry remains open.

Although the $22.5 million fine is a record for the FTC, it won’t leave much of a financial dent at Google. The company had $43 billion in cash at the end of June and generates $22.5 million in revenue roughly every four hours.

“This record fine will send a signal to a lot of Internet companies, but there’s still some question whether the FTC has the authority and resources to rein in an entity as big and powerful as Google,” said Carl Tobias, a Richmond University law professor who followed the Safari case.

Bad publicity may be the bigger blow for Google, which takes so much pride in its scruples that it has adopted “Don’t Be Evil” as its corporate motto.

“This has to sting. They don’t want to lose too much goodwill,” said Justin Brookman, director of consumer privacy for the Center for Democracy & Technology.

The FTC’s willingness to settle with Google without an admission of wrongdoing troubled one of the agency’s own commissioners, J. Thomas Rosch. He voted against the settlement because he didn’t believe the agreement was in the public interest without Google admitting liability.

But the FTC’s four other commissioners voted in favor of the settlement.

“We don’t get anything out of an admission other than a good headline,” Vladeck said. “It is not of any practical value to us.”

The fine surpasses a nearly $19 million penalty that the FTC slapped in 2010 on a telemarketer accused of duping people into believing they were donating to charities.

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