Google Faces Massive Fines in Privacy Probe
Google could face hefty fines and major litigation as regulators in both the U.S. and Europe investigate its former tracking issues in Safari browsers.
The FTC is examining whether Google’s circumvention of Safari’s privacy settings last year violated its settlement with the regulator, in which Google promised to not “misrepresent” its privacy policies to consumers, according to sources cited by the Wall Street Journal. In Europe, the French Commission Nationale de l’Informatique et des Libertés, or CNIL, will add the Safari workaround to an already existing investigation into Google’s privacy-policy changes.
The Safari Tracking Workaround Explained
Google recently admitted it got around Safari’s privacy settings last year in order to embed its “+1” button in some ads, which then planted a cookie onto users’ systems, allowing them to track online activity. The Mountain View, Calif.-based company said it inadvertently tracked Safari users, and discontinued the practice after being contacted by the Wall Street Journal over the issue.
Regulators Tighten the Net
Google is already the center of a number of regulators’ investigations, but momentum is beginning to build against the search giant and the consequences could be steep.
The FTC, for instance, is already looking into Google’s agreement with various tech companies to make its search engine the default on a number of mobile devices and recently subpoenaed Apple on the matter. Google settled last fall with the regulator and agreed to a series of privacy audits every two years, in addition to promising extra transparency around its privacy practices. The Safari error would be a major violation of that agreement.
Fines, Intent, and Legal Risk
In Europe, the scrutiny against Google’s treatment of privacy and user data is even more intense, and the company is already drawing heat for its recent privacy policy changes from E.U. regulators. Adding the Safari error to an already existing investigation weighs even more evidence against Google.
The investigations — which also include state agencies in the U.S., according to the WSJ — could saddle Google with years of legal battles as well as hefty fines for privacy violations. The FTC fine for violating its settlements is $16,000 per violation, per day. With millions of people using Safari as the most commonly used mobile browser, the fine levied against Google would be significant.
However, FTC must prove that Google acted intentionally in order to obtain penalties from the company for violating the settlement. Google maintains its tracking from the Safari workaround was inadvertent and the company took action quickly when the issue came to light. The matter will likely lead to a protracted legal battle with million of dollars in fees at stake.
Advertising Pressure and Competitive Fallout
Google’s great wealth and success stems from its ability to sell online ads, and using cookies to track user information and activities help it serve targeted ads that advertisers pay premium amounts for.
But Google faces major competition from Facebook for these kind of ads. The Safari workaround, unintentional or not, revealed a company pushed to take major action in the face of this heated rivalry. To compete, Google is trying to push its own social-networking efforts, relying on Google+ and the +1 button to help it gather data on users in its quest for targeted advertising. In this case, its actions in trying to gather information on Safari users went too far and the consequences could take a toll on Google’s future competitiveness.
In light of ramped-up scrutiny, Google logically should exercise more caution, but former executives of the company warn the search giant is getting more reckless in its drive to compete for ad dollars against rivals. This week former Google executive James Whittaker stated the company was trying to push its rival social-networking service, Google+, into all aspects of its business. Whittaker stated in a public letter that Google+ became “an ominous name invoking the feeling that Google alone wasn’t enough.”
Google still sits pretty when it comes to revenue gleaned from online ads, but the company has increasingly little room for error, especially as regulators continue to monitor it closely.
