Google Fined $22.5 Million, Ordered To Expire Cookies On Safari Users’ Computers

by Tara Arick on November 27, 2012 · 0 comments

in e-discovery,Product Liability

- From LexisNexis® Mealey’s™ Daily Legal News.

A California federal judge on Nov. 20 approved a stipulated order under which Google Inc. was fined $ 22.5 million for violating the Federal Trade Commission Act and enjoined from any further placement of advertising cookies on the computers of any users of Apple Inc.’s Safari Web browser (United States of America v. Google Inc., No. 3:12-cv-04177, N.D. Calif.; 2012 U.S. Dist. LEXIS 164401).

The injunction and civil penalty order was signed by U.S. Judge Susan Illston of the Northern District of California four days after she had issued an order approving a stipulation by the U.S. government and Google in which Google consented to settlement of the FTC’s claims against it without admitting any violation of the act.

FTC Proceeding 

Previously, the FTC had initiated an administrative proceeding against Google for violating the FTC Act for allegedly misrepresenting how it would use information it collected from users in conjunction with Google’s Gmail email service and its now-defunct social network Google Buzz. In an October 2011 consent order, Google was prohibited from misrepresenting “in any manner, expressly or by implication,” how it ” maintains and protects the privacy and confidentiality” of personal information collected from users, such as names, addresses, email addresses and other contact or identifying information.

In August, the government filed the present complaint against Google, alleging that Google was violating that order and the FTC Act with its targeted advertising and placement of tracking cookies on certain of its users’ computers. Google, like many Internet services, places cookies on users’ computers for a variety of tracking purposes. Cookies are small text files that can be used to collect and store information about a user’s online activities, such as Web pages he or she has visited. Google would use such information to place targeted advertisements on users’ computers via a partnership with DoubleClick.net.

Misrepresentation Alleged

Although Google has provided various methods for users to opt out of having cookies placed on their computers, the government alleged that these methods did not work for users of the Safari browser. Thus Safari users’ computers allowed DoubleClick.net cookies to be stored on their computers despite the users’ wishes to the contrary. The government said that this practice ran contrary to Google’s specific representations that users could opt out.

The government alleged that Google collected users’ covered information, served targeted advertisements and misrepresented compliance with the self-regulatory code of conduct of the Network Advertising Initiative, of which Google is a member. These actions all violated the FTC consent order, the government said, asking the District Court to assess civil penalties against Google for these violations and to enjoin it from any further violations.

Consent Order

The day after the complaint was filed, the government and Google filed a proposed stipulated order for permanent injunction and civil penalty judgment. A hearing on the matter was held Nov. 16, after which Judge Illston approved the proposed order.

In addition to paying the $ 22.5 million fine, the order states that Google must set in place a system that deletes its cookies from Safari browser users’ computers. That system must remain in place until Feb. 15, 2014. After that date, Google is required to report to the FTC on its compliance with the order.

Amicus Objection

Consumer Watchdog filed an amicus curiae brief in August, in which it objected to the proposed order. Consumer Watchdog argued that the injunction was inadequate and not permanent, that the penalty was too small and that Google should be forced to admit liability.

Judge Illston found that the parties’ agreement sufficiently addressed these concerns, calling the injunction “fair, adequate and reasonable.” The “compliance reporting mechanism” will ensure that Google maintains its users’ privacy and does not misuse any information it collected in the past, the judge said. She also found the assessed penalty to be reasonable and in line with awards in similar such cases. Additionally, the judge noted that “courts in this circuit have upheld many agreements without an admission of wrongdoing,” finding no case law support for Consumer Watchdog’s insistence of a liability admission.

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