Nickels Not Pickles
You might have heard that Google engineers created a way to surreptitiously collect data on all Safari users – including all iPad, iPhone and iPod Touch users – ignoring the privacy settings. As a result of a computer scientist by the name of Jonathan Mayer, his investigation, and a subsequent media uproar, the FTC got involved, and eventually fined Google a few nickels.
The Federal Trade Commission fined Google $22.5 million on Thursday to settle charges that it had bypassed privacy settings in Apple’s Safari browser to be able to track users of the browser and show them advertisements, and violated an earlier privacy settlement with the agency.
The fine is the largest civil penalty ever levied by the commission, which has been cracking down on tech companies for privacy violations and is also investigating Google for antitrust violations.
“The social contract has to be that if you’re going to hold on to people’s most private data, you have to do a better job of honoring your privacy commitments,” said David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, in a call with reporters. “And if there’s a message the commission is trying to send today, it’s that.”
The commission said Google had broken the terms of a 2011 settlement over privacy missteps related to the Buzz, a social networking tool now defunct.
(click here to continue reading F.T.C. Fines Google $22.5 Million for Safari Privacy Violations – NYTimes.com.)
And I say nickels, because, to quote an earlier blog post:
The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated
(click here to continue reading FTC Should Pursue Case Against Google at B12 Solipsism.)
Ride Smarter
Let’s do the math, as best we can on this convenient envelope on my desk. Google broke their agreement for about a year.1 Even if there was only one violation per day, this adds up to $5,840,000 in fines. But there are probably 200,000,000 iOS devices in active use2, plus desktop Macs running Safari, so potentially, Google was liable for 200,000,000 x 365 x $16,000 = $1,168,000,000,000,000 in fines. Doh! Of course, the FTC doesn’t have the gumption to fine any corporation that much. Instead they fined Google $22,000,000.
For comparison, Google’s annual revenue is over $43,000,000,000 (per their 2nd Q 2012 report PDF). $22.5 million divided by $43.16 billion is 0.05213%. A joke in other words, a rounding error. If you made $50,000 a year in gross salary, and you got a fine of this magnitude, you’d pay…wait for it…$26. Yep, just twenty six dollars. Would it be worth it to you to pay a couple bucks a month in exchange for sellable advertising data on 200 million phones and iPads? Hell yes! Those cookies are a large reason why Google makes $43 billion a year, obviously they are valuable!
Google got off way, way too easily.
Let Me Show You How to Eagle Rock
What about those incompetent boobs at the Federal Trade Commission? The FTC isn’t very motivated to snoop out privacy invasions in the first place, as Wired reported back in June, 2012:
Jonathan Mayer had a hunch.
The young computer scientist suspected that online advertisers might be following consumers around the web — even when they set their browsers to block the snippets of tracking code called cookies. If Mayer’s instinct was right, advertisers were eying people as they moved from one website to another even though their browsers were configured to prevent this sort of digital shadowing. Working long hours at his office, Mayer ran a series of clever tests in which he purchased ads that acted as sniffers for the sort of unauthorized cookies he was looking for. He hit the jackpot, unearthing one of the biggest privacy scandals of the past year: Google was secretly planting cookies on a vast number of iPhone browsers. Mayer thinks millions of iPhones were targeted by Google.
The feds are often the last to know about digital invasions of your privacy. This is precisely the type of privacy violation the Federal Trade Commission aims to protect consumers from, and Google, which claims the cookies were not planted in an unethical way, now reportedly faces a fine of more than $10 million. But the FTC didn’t discover the violation. Mayer is a 25-year-old grad student working on law and computer science degrees at Stanford University. He shoehorned his sleuthing between classes and homework, working from an office he shares in the Gates Computer Science Building with students from New Zealand and Hong Kong. He doesn’t get paid for his work and he doesn’t get much rest.
If it seems odd that a federal regulator was scooped by a sleep-deprived student, get used to it, because the federal government is often the last to know about digital invasions of your privacy. The largest privacy scandal of the past year, also involving Google, wasn’t discovered by federal regulators, either. A privacy official in Germany forced Google to hand over the hard drives of cars equipped with 360-degree digital cameras that were taking pictures for its Street View program. The Germans discovered that Google wasn’t just shooting photos: The cars downloaded a panoply of sensitive data, including emails and passwords, from open Wi-Fi networks. Google had secretly done the same in the United States, but the FTC, as well as the Federal Communications Commission, which oversees broadcast issues, had no idea until the Germans figured it out.
(click here to continue reading Your FTC Privacy Watchdogs: Low-Tech, Defensive, Toothless | Threat Level | Wired.com.)
No wonder Google, and Microsoft, and others, spend so much money on lobbyists…
Google spent $5.03 million on lobbying from January through March of this year, a record for the Internet giant, and a 240 percent increase from the $1.48 million it spent on lobbyists in the same quarter a year ago, according to disclosures filed Friday with the clerk of the House.
By comparison, Apple spent $500,000; Facebook spent $650,000 Amazon spent $870,000; and Microsoft spent $1.79 million. Google even outspent Verizon Wireless, a notoriously big spender, which spent $4.51 million.
(click here to continue reading Under Scrutiny, Google Spends Record Amount on Lobbying – NYTimes.com.)
Footnotes: