Google’s FTC Settlement marks the first time in the Federal Trade Commissions’ history it is requiring a company to implement a comprehensive privacy program to protect the privacy of consumers’ information.  Google Inc. has agreed to settle Federal Trade Commission charges that it used deceptive tactics and violated its own privacy promises to consumers when it launched its social network, Google Buzz, in 2010.

Google’s FTC Settlement | What happened?

According to details released by the FTC today, Google’s FTC settlement was focused on its actions from launching Google Buzz last year:

Google launched its Buzz social network through its Gmail web-based email product. Although Google led Gmail users to believe that they could choose whether or not they wanted to join the network, the options for declining or leaving the social network were ineffective. For users who joined the Buzz network, the controls for limiting the sharing of their personal information were confusing and difficult to find, the agency alleged.

When Google launched Buzz, its privacy policy stated that “When you sign up for a particular service that requires registration, we ask you to provide personal information. If we use this information in a manner different than the purpose for which it was collected, then we will ask for your consent prior to such use.” Google’s FTC Settlement charges that Google violated its privacy policies by using information provided for Gmail for another purpose – social networking – without obtaining consumers’ permission in advance.

The agency also alleges that by offering options like “Nah, go to my inbox,” and “Turn Off Buzz,” Google misrepresented that consumers who clicked on these options would not be enrolled in Buzz. In fact, they were enrolled in certain features of Buzz.

The complaint further alleges that a screen that asked consumers enrolling in Buzz, “How do you want to appear to others?” indicated that consumers could exercise control over what personal information would be made public. The FTC charged that Google failed to disclose adequately that consumers’ frequent email contacts would become public by default.  To read more about Google’s FTC Settlement, please visit http://www.ftc.gov/opa/2011/03/google.shtm

Google’s FTC Settlement | What’s the penalty?

According to Google’s FTC settlement, Google will have to submit to regular, independent privacy audits once every two years for the next 20 years and will be required to obtain “affirmative consent” from users before changing how it shares their personal data with third parties.  According to Google’s FTC settlement statement:  “The proposed settlement bars the company from future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years.”

Surprisingly there is no fine associated with Google’s FTC settlement, but Jessica Rich, the deputy director of the FTC’s Bureau of Consumer Protection, noted that the agency sees the settlement as a “tough order that will impose substantial costs,” particularly because as part of Google’s FTC settlement, they will have to hire an outside auditor to monitor their privacy policies.

In a blog post, Google apologized for the “mistakes we made with Buzz” and noted that the FTC’s announcement “thankfully put this incident behind us.”  No doubt that Google’s FTC settlement will impact the way online companies view their customer’s information.

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