FTC: Google To Pay Record Fine Over Safari Privacy Violation

FILE- In this Thursday, April 12, 2012, photo, a Google logo is displayed at the headquarters in Mountain View, Calif. Google
FILE- In this Thursday, April 12, 2012, photo, a Google logo is displayed at the headquarters in Mountain View, Calif. Google Inc. reports quarterly financial results after the market closes on Thursday, July 19, 2012. (AP Photo/Paul Sakuma, File)

Google has agreed to pay a record settlement over charges that it bypassed privacy settings in Apple’s Safari browser in order to display targeted advertisements to users who thought they had blocked web tracking, the Federal Trade Commission said Thursday.

The $22.5 million fine is the largest settlement ever obtained by the commission.

Google generates billions of dollars in revenue by displaying targeted ads to users by using "cookies," or small files installed on web browsers that let the company track browsing activity.

Google had told Safari users that their browser's privacy settings blocked tracking by default. But Google found a way to bypass those settings by exploiting a loophole in Safari's browser, according to a report earlier this year by the Wall Street Journal. Once the code was installed, Google could track users across numerous websites in the company's DoubleClick ad network, the Journal report said.

The FTC charged that Google misrepresented how Safari users could avoid targeted advertising by the company. This violated an earlier settlement with the commission over privacy missteps involving Google Buzz, a social network for Gmail users. Under that settlement, Google faced fines for misleading consumers about their privacy practices.

"The record setting penalty in this matter sends a clear message to all companies under an FTC privacy order,” FTC Chairman Jon Leibowitz said in a statement Thursday. "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."

In addition to paying the fine, Google will be required to disable tracking cookies on consumers' computers. Google did not admit to wrongdoing, and had previously said the tracking was accidental. In a statement Thursday, the company said it has taken steps to remove cookies from Apple's browsers and said the tracking code "collected no personal information."

"We set the highest standards of privacy and security for our users," the company said.

The $22.5 million fine is a small drop in the bucket for the search giant. Last year, Google earned $37.9 billion in revenue, nearly all of which came from advertising.

In a conference call with reporters, David Vladeck, the director of the FTC's Bureau of Consumer Protection, said the fine "may not seem like a lot of money to Google." But he said he hoped the fine "sent a clear message" to the company that violating consumers' privacy "will be punished severely."

Google's privacy practices have come under increasing scrutiny over the past year. British regulators are looking into potential privacy violations involving the company's Street View cars, which potentially scooped up personal information from citizens' Wi-Fi networks while taking pictures of city streets.

Meanwhile, the FTC has launched a separate antitrust investigation into whether Google has manipulated its search results to display competitors' websites lower on the page.

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