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 users’ 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 Apple’s Safari browser. The scheme involved coding ads to masquerade as form submissions in order to install advertising cookies (see my colleague Tom Krazit’s great explanation of the tricky business — and its relation to Google+ — 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 FTC’s $22.5 million punishment is based on Google’s failure to tell the truth about its advertising practices.
The federal agency has in recent years emerged as the country’s de facto chief privacy cop even though the laws governing the agency aren’t particularly designed to do this. While other countries have special Privacy Commissioners, the FTC instead relies on its traditional powers to regulate “deceptive” and “unfair” trade practices.
The FTC recently used these powers to slap a 20-year “consent decree” 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 didn’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.