Google pays fine over street view privacy breach

by David Streitfeld, New York Times

Google has agreed to pay $7 million as a result of an investigation brought by a coalition of state attorneys general, officials said Tuesday, in one of the largest fines for violating privacy in the digital age.

The fine stems from the Street View case, where Google deployed special vehicles to photograph the houses and offices lining the world’s streets. But for several years the company was also secretly collecting personal information ‘ e-mails, medical and financial records, passwords ‘ as it cruised by. It was data-scooping from millions of unencrypted wireless networks.

‘Consumers have a reasonable expectation of privacy,’ George Jepsen, Connecticut attorney general, said in a statement Tuesday. ‘This agreement recognizes those rights and ensures that Google will not use similar tactics in the future to collect personal information without permission from unsuspecting consumers.’

As part of the settlement, Google agreed that it had acted improperly and agreed to engage in a comprehensive employee education program about privacy and to inform the public about securing wireless networks and protecting personal information. Thirty-eight states participated in the investigation.

Google has repeatedly been faulted by regulators for privacy violations. Last summer the search giant paid $22.5 million to settle Federal Trade Commission charges that it had bypassed the privacy settings on Apple’s Safari browser. That fine, the largest civil penalty ever levied by the F.T.C., came after Google agreed to be audited by the agency for 20 years for privacy violations related to a social networking feature.

Some of Google’s most severe critics, who feel that the company is so big and powerful that it often eludes censure, pronounced themselves pleased with the attorneys general’s actions.

‘This is a significant privacy decision,’ said Marc Rotenberg, executive director of the Electronic Privacy Information Center. He noted it was more than 200 times the amount the Federal Communications Commission had fined Google last year for obstructing its own Street View investigation.

Still, the attorneys general’s fine is a pittance for Google, which has a net income of about $32 million a day.

‘It is the public opprobrium, not the money, that counts in these cases,’ said David Vladeck, a professor of law at Georgetown University who directed the F.T.C.’s Bureau of Consumer Protection. ‘And I think people were rightly unhappy with Google’s collecting the information in the first place and then Google’s lame explanation.’

Google initially denied any data had been collected from unknowing individuals, then sought to downplay what it had and fought with regulators who wanted to examine the data.

‘We work hard to get privacy right at Google,’ said Niki Fenwick, a spokeswoman. ‘But in this case we didn’t.’ She added that Google has since improved its ‘systems.’

The attorneys general investigation began in June 2010. Richard Blumenthal, then Connecticut’s attorney general, said his office would lead a multistate investigation into what he called ‘Google’s deeply disturbing invasion of personal privacy.’

In December 2010, Mr. Blumenthal issued a civil investigative demand, equivalent to a subpoena, to get the data. Google never gave Connecticut any data.