It was the largest penalty ever directed by the U.S. Federal Trade Commission against any one company, remarkable in its dollar figure, but fairly light in the relative fiscal harm it may do the offender.
This week, San Francisco-based Google Inc. (Nasdaq: GOOG) worked out a deal to pay more than $22 million U.S. in fines for secretly bypassing privacy settings of millions of Apple (Nasdaq: AAPL) users.
Mind you, the story that broke mid-week in the pages of the Wall Street Journal also noted that, while millions of dollars would be pouring from the coffers of the behemoth search engine, it represents what Google makes in a matter of hours, so it’s nothing to be cried over.
Indeed, with $49 billion U.S. in the bank, the Internet's search and advertising leader is expected to generate revenue this year of about $46 billion U.S.
Nor does the case appear to have dented the company’s stock price, which rose late Friday to $579.00 U.S., or 1.5% higher than the day before. Granted, the issue’s 52-week high still towers over that level, at $670.25 U.S., at which it arrived in early January, while its trough of $480.60 U.S. was plumbed early last October.
Another significant barometer of the company’s fiscal health will be seen Thursday, July 19, following the close of the markets in North America, when Google reports second-quarter finances.
Even so, the circumstances surrounding the case may renew questions about the sincerity of Google's "Don't Be Evil" motto and raise doubts about the company's credibility as it wrestles with broader regulatory investigations into whether it has been abusing its influential position on the Internet to stifle competition.
By demanding that Google pay a record amount, the commission may be trying to send a message that it intends to be more vigilant about privacy missteps as people conduct more of their lives online. The agency has been pushing Internet services and advertisers to agree voluntarily to refrain from tracking Web surfers' activities without prior permission, but the effectiveness of that call is in question.
The WSJ item reported that the FTC opened its investigation five months ago after a researcher at Stanford University published a study revealing that Google Inc. had overridden Safari safeguards that are supposed to prevent outside parties from monitoring Web surfing activity without a user's permission.
The tracking occurs through snippets of computer coding, known as "cookies," that help Internet services and advertisers target marketing pitches based on an analysis of the interests implied by a person's Web surfing activity.
Google immediately withdrew its intrusive technology from Safari after the manipulation was reported. What remains to be seen now is whether the company’s profile will be harmed by this case.
