'Fair, Adequate And Reasonable': Federal Judge Approves The FTC's $22.5 Million Settlement With Google

Author:Ms Cynthia Larose
Profession:Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
 
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As previously reported in this blog , Google, Inc. agreed to pay $22.5 Million to settle Federal Trade Commission charges that it misrepresented its data collection practices to users of Apple, Inc.'s Safari Internet browser .  That settlement has now been approved by U.S. District Judge Susan Illston, following a challenge brought by Consumer Watchdog, an advocacy group.

The settlement arose from the alleged violation by Google of an October 2011 consent order issued by the FTC following the launch of Google's "Buzz" social network.  That consent order prohibited Google from making future misrepresentations regarding, among other things, its collection and use of private information and its users' control over that information.  The FTC claimed that Google violated that order by assuring users of the Safari browser that the default settings of that browser would block cookies, but then overriding that software to secretly collect cookies from Safari users.  The FTC announced the $22.5 Million settlement in August of this year.

Consumer Watchdog challenged the proposed settlement on the basis that the penalties imposed on Google were not stringent enough and permitted Google to deny that it had violated the consent order.  In addition, while the settlement imposes a timeline for the expiration of the cookies set up by Google, it does not require that Google expunge the secretly collected data which, Consumer Watchdog argued, "permits Google to continue to profit from its wrongdoing indefinitely."   Consumer Watchdog also argued that the $22.5 Million amount, a record for an alleged violation of a consent order, was not a steep enough penalty.  Consumer Watchdog cited estimates of statutory penalties by third party analysts suggesting that a penalty between $3 and $8 Billion would be more appropriate.

Notwithstanding Consumer Watchdog's arguments, Judge Illston order approving the proposed settlement characterized the deal as "procedurally and substantively fair, adequate, and reasonable."   Regarding Google's ability to continue using the secretly-collected information, Judge Illston referenced arguments by both Google and the FTC that that risk had been considered and dismissed because the information was of negligible value and was unlikely to be used.  Judge Illston also deferred to the FTC's judgment that "the risk that a more...

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