Google hit with fine, bad press for tracking users

Google will pay a historic fine to settle Federal Trade Commission charges that it bypassed privacy settings and used cookies to track Apple Safari users who visited Google's DoubleClick ad network.

The $22.5 million civil penalty is the largest ever secured by the FTC for a violation of this type. The settlement also mandates that Google disable all the cookies it placed on affected users' computers.

But some observers are calling for even stiffer penalties. The fine is "chump change" for Google, and the FTC shouldn't have agreed to a settlement unless Google was willing to admit guilt, said John Simpson, director of the privacy project at ConsumerWatchdog.org.

Pointing out that Google reported more than $12 billion in pretax earnings in 2011, Dan Olds, an analyst at Gabriel Consulting Group, said the FTC fine "is more like a rounding error than a serious punishment."

Olds said he doubts Google will change its ways significantly, but he speculated that the bad press "might keep Google from so obviously flouting an FTC order again" -- though it could just defy regulators in ways that are harder to detect.

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