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United States v. Google, Inc.
By Casey Holzapfel – Edited by Charlie Stiernberg

United States v. Google, Inc., No. CV 12-04177 SI (N.D. Cal. Nov. 16, 2012)
Slip Opinion

The United States District Court for the Northern District of California approved a proposed consent order between the United States and Google that requires Google to pay a $22.5 million civil penalty. Amicus curiae Consumer Watchdog was granted leave to submit a brief challenging the stipulated consent order, after it was filed in August. District Judge Susan Illston was not persuaded by Consumer Watchdog’s brief, however, and rejected its challenge.

The settlement is the result of allegations by the United States that Google violated a previous consent order with the Federal Trade Commission (“FTC”) by overriding Safari software that blocked cookies and secretly collecting cookies from Safari users without authorization. The settlement includes a $22.5 million civil penalty as well as an injunction against Google; however, Google is not required to admit liability.

Bloomberg provides an overview of the order. Newsday details Consumer Watchdog’s other allegations, including a suggestion that FTC’s separate antitrust investigation of Google may be weak. Forbes provides an overview of the settlement proposed in August.

In the previous action, which gave rise to the consent order at issue, the FTC alleged Google had misrepresented its privacy policies to Gmail users when it launched its social networking tool, Google Buzz. The FTC claimed that Google improperly used Gmail users’ private information and automatically enrolled users in Google Buzz, despite representations by Google to the contrary. The FTC settled with Google in October 2011, with a consent order prohibiting Google from future misrepresentations concerning both Google’s handling of users’ private information and Google’s compliance with privacy programs such as the Network Advertising Initiative (“NAI”).

In the current action, the United States alleged that Google violated both parts of the October 2011 consent order by overriding Safari software that blocks cookies. The United States claimed that Google placed unauthorized cookies on Safari users’ computers in violation of the NAI code of conduct. Without admitting fault, Google agreed pay a civil penalty of $22.5 million and comply with an injunction requiring it to maintain systems that delete Google cookies from Safari browsers until February 15, 2014. Furthermore, Google must report to the FTC within twenty days of February 15, 2014, to show that it is complying with the order.

Amicus curiae Consumer Watchdog objected to the new consent order, claiming that the injunction was inadequate, the civil penalty was too small, and Google should be forced to admit liability. Consumer Watchdog claimed that the injunction will be in effect for too short a time period and leaves open the option for Google to resume its unauthorized practices after February 15, 2014. However, the court held that if the order was the result of “good faith, arms-length negotiations,” the order is presumed to be fair and reasonable and the objecting party has the burden of disproving this presumption. Google, slip op. at 3–4. Judge Illston found that Consumer Watchdog’s objections were insufficient to satisfy this burden. Specifically, Judge Illston found that a longer injunction was unnecessary, because Google is still under the requirements of its previous consent order with the FTC.

A news release by the FTC notes that Google’s $22.5 fine is the largest the FTC has issued for a violation of an administrative order. Wired proposes that while the fine is not a major financial setback for Google, the settlement will substantially affect Google’s public image.

 

Posted On Dec - 4 - 2012 Comments Off

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