by: Jeff John Roberts
Another day, another privacy payout. The Wall Street Journal is reporting that Google will pay $22.5 million to settle claims that it hacked usersâ€™ iPhones in order to serve ads to them.
The incident stems from a highly publicized incident in February in which a Stanford graduate student discovered that Google was using trickery in order to by-pass ad-blocking settings on Appleâ€™s Safari browser. The scheme involved coding ads to masquerade as form submissions in order to install advertising cookies (see my colleague Tom Krazitâ€™s great explanation of the tricky business â€” and its relation to Google+ â€” here).
While other companies and app makers may have engaged in similar chicanery, the Federal Trade Commission appears determined to hit deep-pocketed Google hard. The Journal reports that the FTCâ€™s $22.5 million punishment is based on Googleâ€™s failure to tell the truth about its advertising practices.
The federal agency has in recent years emerged as the countryâ€™s de facto chief privacy cop even though the laws governing the agency arenâ€™t particularly designed to do this. While other countries have special Privacy Commissioners, the FTC instead relies on its traditional powers to regulate â€œdeceptiveâ€ and â€œunfairâ€ trade practices.
The FTC recently used these powers to slap a 20-year â€œconsent decreeâ€ on Google to punish it for missteps related to its ill-fated Google Buzz social network. That consent decree in turn provided the FTC with powers to fine Google $16,000 a day if it violated the terms of the decree. That is what appears to have happened here: Google didnâ€™t comply with terms of the decree that requires it to tell users about its advertising practices.
Google also faces a series of private class action suits over the Safari incident. The news of the FTC fine comes at a time when every large technology company is confronting lawsuits and regulatory scrutiny over their privacy practices.