Judge ap­proves FTC'S $22.5m fine on Google

The Pak Banker - - Front Page -

SAN FRAN­CISCO

A fed­eral judge has ap­proved a $22.5 mil­lion (Dh82.6 mil­lion) fine to pe­nalise Google for an al­leged pri­vacy breach, re­ject­ing a con­sumer rights group's plea for tougher pu­n­ish­ment.

The bless­ing from US dis­trict judge Su­san Ill­ston came late Fri­day. She made her rul­ing a few hours af­ter a hear­ing in San Fran­cisco for fi­nal ar­gu­ments about a fine that's the corner­stone of a set­tle­ment reached three months ago be­tween the Fed­eral Trade Com­mis­sion (FTC) and Google Inc.

The re­buke re­volves around al­le­ga­tions that Google duped mil­lions of web surfers us­ing the Sa­fari browser into be­liev­ing their on­line ac­tiv­i­ties couldn't be tracked by the com­pany as long as they didn't change the browser's pri­vacy set­tings. That as­sur­ance was posted on Google's web­site ear­lier this year even as the in­ter­net search leader was in­sert­ing com­puter cod­ing that by­passed Sa­fari's au­to­matic set­tings and en­abled the com­pany to peer into the on­line lives of the browser's users.

The FTC­sumer rig con­cluded that the con­tra­dic­tion be­tween Google's stealth track­ing and its pri­vacy as­sur­ances to Sa­fari users vi­o­lated a vow the com­pany made in an­other set­tle­ment with the agency last year. Google had promised not to mis­lead peo­ple about its pri­vacy prac­tices.

While the FTC hailed its ac­tions as proof of its re­solve to pro­tect the pub­lic in­ter­est, a con­hts group at­tacked the set­tle­ment as an ex­am­ple of in­ef­fec­tual reg­u­la­tion.

The group, Con­sumer Watch­dog, is try­ing to bring more at­ten­tion to the is­sue as the FTC wraps up a sep­a­rate in­ves­ti­ga­tion into com­plaints that Google has been sti­fling com­pe­ti­tion and rais­ing on­line ad prices by high­light its own ser­vices in its in­flu­en­tial search engine.

Ill­ston, though, found that the fine and other facets of the set­tle­ment were all "fair, ad­e­quate and rea­son- able."

"We're glad the court agreed there was no merit to this chal­lenge," Google said in a state­ment.

Con­sumer Watch­dog at­tor­ney Gary Re­back said he is hop­ing to pres­sure the FTC to take Google to court in the an­titrust in­ves­ti­ga­tion in­stead of ne­go­ti­at­ing con­sent de­crees and other types of set­tle­ments, as it did in the Sa­fari pri­vacy flap.

A con­sent de­cree "is not a good way to po­lice Google," Re­back said in an in­ter­view af­ter Fri­day's court hear­ing. Re­back is also rep­re­sent­ing some of the in­ter­net com­pa­nies that have filed com­plaints against Google in the an­titrust case.

FTC chair­man Jon Lei­bowitz said he ex­pects reg­u­la­tors to de­cide whether to sue, set­tle or sim­ply close the an­titrust in­ves­ti­ga­tion by the end of this year.

In the Sa­fari case, Con­sumer Watch­dog ar­gued that the fine amounts to loose change for a com­pany like Google, which gen­er­ates about $22.5 mil­lion in rev­enue ev­ery four hours. In le­gal briefs, Re­back as­serted that Google should be fined at least $3 bil­lion be­cause of the num­ber of peo­ple po­ten­tially af­fected. The FTC es­ti­mates about 190 mil­lion peo­ple use Sa­fari to browse the web on com­put­ers, smart­phones and tablets made by Google's ri­val Ap­ple Inc. But the agency said the im­pact of Google's breach was rel­a­tively small, es­ti­mat­ing the com­pany picked up about $4 mil­lion in rev­enue from the in­tru­sion.

The FTC con­sid­ers the fine to be a mile­stone be­cause it's the largest the agency has ever levied for a civil vi­o­la­tion.

Con­sumer Watch­dog also con­tended the set­tle­ment lacked teeth be­cause it al­lowed Google to deny any li­a­bil­ity for its con­duct. That echoed a con­cern of FTC Com­mis­sioner J. Thomas Rosch, who voted against the Google set­tle­ment. Lei­bowitz and three other FTC com­mis­sion­ers voted for the set­tle­ment any­way be­cause they be­lieve it will de­ter sim­i­lar breaches in the fu­ture.

Google in­sists it didn't in­ten­tion­ally by­pass Sa­fari's de­fault set­tings.

Fi­nally, Con­sumer Watch­dog blasted the set­tle­ment for al­low­ing Google to re­tain the data that it got from Sa­fari users with­out au­tho­ri­sa­tion. Ill­ston brushed off the ob­jec­tions about the mag­ni­tude of the fine and Google's de­nial of li­a­bil­ity. Dur­ing Fri­day's court hear­ing, she probed deeper into Google's re­ten­tion of the Sa­fari browser data, rais­ing the pos­si­bil­ity that she might re­quire re­vi­sions to that por­tion of the set­tle­ment.

In her fi­nal rul­ing, Ill­ston ac­cepted the FTC's as­ser­tion that the set­tle­ment "suf­fi­ciently pro­tects con­sumers from on­go­ing harm with­out ex­pos­ing them to ad­di­tional risks." She cited le­gal prece­dent com­pelling her to "pay def­er­ence" to the gov­ern­ment agency that ne­go­ti­ated and sub­mit­ted a pro­posed set­tle­ment such as the Sa­fari case.

The FTC and Google spent more than two months work­ing out the de­tails of the set­tle­ment, Ill­ston noted in her rul­ing.

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