Google Gets Maximum Fine After 'Impeding' Privacy Probe
By Brian Womack and Todd Shields - Apr 16, 2012 12:00 AM ET
Google Inc. (GOOG) “impeded” and “delayed” a U.S. inquiry into its data collection, according to the latest in a series of regulatory probes of the company’s privacy practices.
The Federal Communications Commission is seeking a $25,000 fine after examining how Google gathered personal e-mails, text messages and other materials through its Street View location service, the agency said in an April 13 filing. That is the maximum penalty for failure to cooperate with an investigation, Tammy Sun, an FCC spokeswoman, said in an interview yesterday.
Google, the world’s most popular search engine, has come under mounting scrutiny from regulators over how it handles data. Last year, the company agreed to 20 years of independent privacy audits to settle claims with the Federal Trade Commission that it deceived users and violated its own privacy policies with the Buzz social network.
“Google unlawfully intercepted and stored millions of wireless communications from Wi-Fi routers,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, which requested the FCC investigation. “We believe that is a violation of the federal wiretap act.”
The Washington-based policy group, which focuses on consumer privacy issues, will ask U.S. Attorney General Eric Holder to investigate, Rotenberg said yesterday.
For three years starting in May 2007, Google collected content from wireless networks that wasn’t needed for its location-based services, according to the FCC filing. Google gathered so-called payload data, including e-mail and text messages, passwords, Internet-usage history, and “other highly sensitive personal information,” the FCC said.
“It was a mistake for us to include code in our software that collected payload data, but we believe we did nothing illegal,” Google said in an e-mailed statement yesterday. “We have worked with the relevant authorities to answer their questions and concerns.”
In May 2010, Google said it would stop using Wi-Fi information for Street View, which displays pictures of streets on Google Maps.
Google violated FCC orders by delaying its search for e- mails, by failing to identify employees and by not verifying the accuracy of its submissions, falling “well short of what we expect and require,” the agency said.
Google didn’t fully respond until September to a query from the preceding December, the FCC said. The company disputed the agency’s “characterization of our cooperation” and said in its e-mailed statement it “will be filing a response.”
The FCC said it wasn’t penalizing Google for violating laws against unauthorized interception of communications.
“There is not clear precedent,” the agency said in the filing. In addition, “significant factual questions” couldn’t be answered because a Google engineer asserted his constitutional right not to testify, the FCC said.
Canada, France and the Netherlands have determined Google violated data protection, online privacy or similar laws and regulations, the FCC said in its filing. Regulators outside the U.S. found that Google had harvested personal e-mails, as well as financial and health records, Rotenberg said.
Google has come under scrutiny for how it uses data in other cases. The FTC is examining whether Google deceived consumers by planting so-called cookies on Apple Inc.’s Safari browser, bypassing privacy settings in the Apple software, a person familiar with the matter said last month.
Also in March, customers sued the company, claiming they were deceived by new privacy rules merging separate policies for about 60 services into one. The National Association of Attorneys General sent a letter to Google Chief Executive Officer Larry Page Feb. 22 signed by 36 attorneys general criticizing the new policy.
While the FCC fine will have little financial impact, it’s a bigger hit in the court of public opinion, said Greg Sterling, an analyst with Opus Research.
“This contributes to an image problem,” Sterling said in an interview. “Many lawmakers and regulators have a negative view of Google, and this just reinforces that.”
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