On November 16, 2012, the District Court for the Northern District of California issued an order approving a proposed settlement between the Federal Trade Commission ("FTC") and Google, Inc. ("Google"). The settlement represents the largest fine for violation of a consent order in FTC history, according to a statement by the FTC.
The FTC alleged that Google violated the terms of a previous Consent Order surrounding Google's social networking product 'Google Buzz' in two ways. First, the FTC claimed that Google tracked consumers without their knowledge or consent using hidden cookies on the Safari web browser, in contravention of the transparency requirements of the Consent Order and Google's representations to consumers. Second, the FTC claimed that Google violated the self-regulatory code of the Network Advertising Initiative ("NAI"), of which Google is a member. The newly-approved settlement requires Google to (i) maintain systems that delete Google cookies from Safari browsers until February 15, 2014, (ii) report to the FTC within 20 days before that date setting forth how it is in compliance with the order, and (iii) pay a civil penalty of $22.5 million dollars.
In response to the proposed settlement, the advocacy group Consumer Watchdog had filed an amicus curiae brief objecting on the grounds that it (i) was an inadequate injunction because it was temporary, not permanent, and permitted Google to continue to profit from the improperly collected consumer date, (ii) was an inadequate financial penalty against Google, and (iii) did not require Google to admit any wrongdoing. The U.S. district judge approving the settlement, however, found that its terms were both procedurally and substantively fair, and gave deference to the FTC's decision.
This article first appeared in Cyberlaw Currents, a Frankfurt Kurnit legal blog.
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