Just around the recent Thanksgiving holiday, a federal district court granted final approval of the record-setting $22.5 million settlement between the Federal Trade Commission and Google, which had been accused of violating the terms of a previous consent order with the agency.
According to the FTC, Google circumvented Safari’s no-tracking browser settings by using hidden code to install a cookie that tracked users’ browsing habits. Although the installation of the cookie itself was arguably not a deceptive practice, Google had informed its users that Safari would block tracking cookies. The failure to honor that statement, the agency claimed, constituted a violation of a 2011 consent decree with the FTC.
Although Google agreed to pay the agency $22.5 million for violating the terms of that agreement – the largest fine ever levied for violating an existing consent order – Commissioner J. Thomas Rosch dissented because Google did not admit liability.
Public interest group Consumer Watchdog also jumped into the fray and filed a notice of objection with the California federal court overseeing the case. The group argued that the penalty was too small, the injunction was inadequate, and that Google should be forced to admit liability.
Despite the objections, U.S. District Court Judge Susan Illston ruled that the settlement is “fair, adequate, and reasonable” and approved the penalty. She disagreed with Consumer Watchdog that the settlement also needs to “protect the public interest” and distinguished this matter from the only other court to have reached such a determination.
Addressing concerns that Google was allowed to keep and use the information it had previously collected from its users, the court said the data was outdated and anonymized and therefore was of very low value to the defendant. She found the injunction adequate because it enjoins Google from collecting new information and sets forth compliance reporting mechanisms.
Given that the FTC never alleged that consumers suffered any monetary harm or that the Safari cookies yielded “significant revenues” for Google, the monetary penalty is appropriate, the court said. And contrary to Commissioner Rosch’s concerns, the “position that a consent decree requires an admission of liability is contradicted by legal history and precedent,” Judge Illston wrote. “Indeed, courts in this circuit have upheld many agreements without an admission of wrongdoing, and Consumer Watchdog fails to cite a single case that does not.” In fact, such a requirement “would in most cases undermine any chance of compromise.”
To read the court’s order in U.S. v. Google, click here.
Why it matters: FTC Bureau of Consumer Protection Director David Vladeck said the court’s approval was “a clear victory for consumers and privacy. As this case and many others demonstrate, the Commission will continue to ensure that its orders are obeyed, and that consumers’ privacy is protected.” The decision also strengthened the position held by the majority of Commissioners that an admission of liability is not required when a defendant settles with an agency.