[governance] Google Safari Fine...

[Riaz K Tayob]

Forden - May 5, 2012 7:01 AM GMT+0300

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Google Inc. (GOOG) is negotiating with the U.S. Federal Trade Commission 
over how big a fine it will have to pay for its breach of Apple Inc. 
(AAPL)’s Safari Internet browser, a person familiar with the matter said.

The fine could amount to more than $10 million dollars, said the person, 
who declined to be identified because the talks are confidential. The 
fine would be the first by the FTC for a violation of Internet privacy 
as the agency steps up enforcement of consumers’ online rights.
Enlarge image Google Said to Face FTC Fine

A pedestrian walks past Google Inc. signage displayed at company 
headquarters in Mountain View, California. Photographer: Tony 
Avelar/Bloomberg

The FTC is preparing to allege that Mountain View, California-based 
Google deceived consumers and violated terms of a consent decree signed 
with the commission last year when it planted so-called cookies on 
Safari, bypassing Apple software’s privacy settings, the person said.

“We will of course cooperate with any officials who have questions,” 
Chris Gaither, a Google spokesman, said in an e- mail, declining to 
comment further. An FTC spokeswoman, Claudia Bourne Farrell, declined to 
comment.

The cookies allowed Google to bypass Safari’s built-in privacy 
protections to aim targeted advertising at users of Safari on computers, 
laptops, iPhones and iPads. Google said at the time that it “didn’t 
anticipate this would happen” and that it was removing the files since 
discovering the slip.

The Safari breach was first identified by Stanford researcher Jonathan 
Mayer, who published a blog entry on his discoveries Feb. 16.
‘Unfair and Deceptive’

The FTC is charged with protecting consumers against “unfair and 
deceptive” practices under the law that created the agency. European 
regulators are probing Google more broadly on its privacy policy and 
sent a detailed questionnaire to the company in March.

Google signed a consent decree with the FTC last year in which it 
settled allegations it used deceptive tactics and violated its own 
privacy policies in introducing the Buzz social-networking service in 
2010. The 20-year settlement bars Google from misrepresenting how it 
handles user information, and requires the company to follow policies 
that protect consumer data in new products and to submit to regular 
privacy audits.

The FTC has the authority to levy fines for violations of its consent 
decrees of as much as $16,000 a day for each violation.
First-Quarter Revenue

Google, the world’s largest Internet search company, on April 12 
reported first-quarter revenue of $8.14 billion, excluding sales passed 
on to partner sites. Profit before certain costs was $10.08 a share.

The agency issued its largest fine in a privacy-related case against 
data broker ChoicePoint Inc. in 2006 for compromises of personal 
financial records of more than 163,000 consumers. ChoicePoint agreed to 
pay $10 million in civil penalties and $5 million in consumer redress in 
a settlement with the FTC.

“Google is quickly becoming the privacy problem child for regulators in 
the U.S. and Europe,” said Jeffrey Chester, executive director of the 
Center for Digital Democracy, which has urged regulators to review the 
handling of consumer data by companies including Google and Facebook 
Inc. “The Commission’s work to enforce its consent decree with Google 
shows there’s a real regulatory cop on the digital beat.”

To contact the reporter on this story: Sara Forden in Washington at 
sforden at bloomberg.net

To contact the editor responsible for this story: Michael Hytha at 
mhytha at bloomberg.net


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