FTC settled with Facebook, while Google will pay $22.5 Million to settle

FTC issued two statements that pertained to privacy policies with two different outcome for Facebook and Google. Facebook was slapped on the wrist by FTC in the Facebook settlement that was published on 8/10/2012, and on the other side of the spectrum, Google’s settlement on 8/9/2012 involved paying a $22.5 Million fine. Facebook is really lucky as their offense is as severe as Google’s, and all they need to do is to “take several steps to make sure it lives up to its promises in the future”, or face the possibility of a fine of $16,000 per violation.

$22.5 Million dollar is the largest fine imposed on any company. Compared to the Janet Jackson SuperBowl wardrobe malfunction which the FCC is still trying to collect on the $500,000 fine, the FTC fine is 45x more that what was imposed on CBS.

The story behind the lawsuit:

Facebook IconFacebook: The lawsuit alleged that Facebook deployed deceptive privacy setting and misrepresented the policy to users of Facebook. Facebook users are able to customize their privacy setting to have pictures, post, profile, etc shared on Facebook to “Only Friends” or “Friends of Friends” or “Customized”, but the setting only apply to other Facebook users. Facebook will still share that information to certain third parties, making that setting ineffective.

From the lawsuit, it was reported that in Facebook generated $777.2 million dollars in advertising revenue in 2009 and the shared information will be available to those advertisers and other third parties.

In the first offense that FTC filled against Facebook, it was technically a warning; if a fine was imposed today, Facebook will be looking at forking out $2,544,475,840,000 as there are 159MM Facebook in US as reported by socialbakers.com.

Google iconGoogle: The lawsuit alleged that Google misrepresented to users of Apple Inc.’s Safari Internet browser that it would not place tracking “cookies” or serve targeted ads to those users, violating an earlier privacy settlement between the company and the FTC. This is the second time that Google is addressing privacy issues with the FTC in the last 12 months as Google settled with the FTC with the Google Buzz fiasco. Part of the settlement in March 2011 involved “future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years.”

W3 reported that Safari users make up about 4% of the total internet users, while US Census in 2010 reported that approximately 52.6 million individuals have access to the internet at home and outside of their house. Taking those number into account, the number of Safari users in 2010 is about 2.1 million users (52.6 million users X 4%). There are sources that speculates that Apple / Mac users make up 10% of the market share as opposed to 4% reported by W3.

Either case, if FTC would to fine Google $16,000 per infraction, Google will be looking at a $33.6 Billion dollar fine as opposed to the $22.5 Million. Although the fine is huge, Google fair pretty well with the $22.5 Million fine, as they could have been slapped with a $33.6 Billion fine; and it is just a drop in the bucket as Google reported $37.9 Billion in revenue for FY 2011.


Google ToolBar spying on your browsing behavior

oogleThe Google ToolBar, one of the most widely downloaded toolbar is in the news when it was mentioned in a lawsuit, citing that it violated a users’ privacy rights because its Toolbar software allegedly transmits surfing habits and transmit those activity back to Google without the users’ consent.

The complaint ‘Weber v. Google, 10-05035’, filed on November 5, 2010 in federal court in San Jose, California, claims Google has misled users who download the software, used to search and browse the web, to believe they can disable features that transmit personal data to the company. The case, which seeks class-action, or group, status, was filed on behalf of Jason Weber of Brooklyn, New York.

“With products such as Toolbar, Google acquires a great deal of information about users’ Internet activities, adding to the already substantial information it acquires by providing a search engine, network advertising, and more,” according to the complaint.

Google says its Toolbar can be set up to not share personal information unless used in conjunction with a Google account.

Google ToolBar was relased on Aug 13, 2003 with these basic features.

  • Pop-up Blocker: Blocks distracting pop-ups while users surf the web.
  • AutoFill: Completes web forms with information that’s saved securely on a user’s own computer.
  • BlogThis: Makes posting links to Blogger.com weblogs quick and easy.

With these additional features:

  • Google Search: Access Google search from any web page.
    Search Site: Search only the pages of the site being viewed.
    PageRank: See Google’s ranking of any page on the web.
    Highlight: Highlight search terms as they appear on the page – each word in its own color.
    Word Find: Find search terms wherever they appear on the page.

Less than one week ago, Google Inc settled a class action lawsuit for Google Buzz amounting to $8.5 million.

Google stung by Google Buzz and settled for $8.5 million

I just got a noticed in my Gmail that Google settled a lawsuit regarding Google Buzz LogoGoogle Buzz which pertained to user privacy. Google Buzz was sure an expensive application for Google to release. The lawsuit preliminary statement states it all.

1. This is a class action lawsuit, brought by, and on behalf of, a nationwide class of
individuals whose privacy rights were violated by the actions of Google Inc. (“Google”) through
its Buzz program.
2. Google automatically added the Google Buzz service to the accounts of all users of Google’s “Gmail” service.
3. Google Buzz made private data belonging to Gmail users publicly available without the users’ knowledge or authorization. This information included some or all of the following: personal contact information, place of residence, occupation, and a list of the users’ frequent email contacts.
4. Google Buzz searched for and acquired pictures, video, text and other data that
users had posted to websites such as Picasa and YouTube. Buzz automatically sent those posts to the email accounts of the users’ frequent email contacts without the users’ knowledge or authorization.
5. When launching its Buzz service, Google failed to provide users with clear information detailing the nature of the new service, including the automatic application of the
Buzz program and its provisions for default disclosure of personal information and default
sharing of posts previously made to other websites.
6. Google has publicly admitted that its Buzz program presents privacy concerns,
and Google has made several waves of modifications to the program. However, Google’s
modifications do not go far enough to address the problem. Furthermore, Google’s actions have already caused damage because the Buzz program disclosed private user information the moment Google launched the service. The bell of breached privacy cannot be un-rung.
7. Google’s public disclosure of private user data violates users’ rights under the Federal Wiretap Act, the Federal Computer Fraud and Abuse Act, the Federal Stored Communications Act, and California common law.

Here is the email I received:

Subject: Important Information about Google Buzz Class Action Settlement
From: Google Buzz

Google rarely contacts Gmail users via email, but we are making an exception to let you know that we’ve reached a settlement in a lawsuit regarding Google Buzz (http://buzz.google.com), a service we launched within Gmail in February of this year.

Shortly after its launch, we heard from a number of people who were concerned about privacy. In addition, we were sued by a group of Buzz users and recently reached a settlement in this case.

The settlement acknowledges that we quickly changed the service to address users’ concerns. In addition, Google has committed $8.5 million to an independent fund, most of which will support organizations promoting privacy education and policy on the web. We will also do more to educate people about privacy controls specific to Buzz. The more people know about privacy online, the better their online experience will be.

Just to be clear, this is not a settlement in which people who use Gmail can file to receive compensation. Everyone in the U.S. who uses Gmail is included in the settlement, unless you personally decide to opt out before December 6, 2010. The Court will consider final approval of the agreement on January 31, 2011. This email is a summary of the settlement, and more detailed information and instructions approved by the court, including instructions about how to opt out, object, or comment, are available at http://www.BuzzClassAction.com.

This mandatory announcement was sent to all Gmail users in the United States as part of a legal settlement and was authorized by the United States District Court for the Northern District of California.

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