Google Agrees to Payment for Lying to FTC (GOOG, AAPL)

Google Inc. (NASDAQ: GOOG) has agreed to pay $22.5 million to settle a claim by the Federal Trade Commission that the company misled users of the Safari browser Apple Inc. (NASDAQ: AAPL) into believing that Google would not install a “cookie” or send targeted advertising to users of the browser. The FTC said that this was the largest penalty ever levied for violating a commission order, and noted:

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.

The crux of the issue is that Google agreed not to install such cookies on users’ computers but did so anyway, in violation of an agreement that the company had already reached with the FTC. From the press release:

According to the FTC’s complaint, Google specifically told Safari users that because the Safari browser is set by default to block third-party cookies, as long as users do not change their browser settings, this setting “effectively accomplishes the same thing as [opting out of this particular Google advertising tracking cookie]. … Despite these promises, the FTC charged that Google placed advertising tracking cookies on consumers’ computers, in many cases by circumventing the Safari browser’s default cookie-blocking setting.

Google has also been ordered to disable all cookies that it said it would not place on users’ browsers. Cookies, what cookies? Oh, those cookies.

Paul Ausick