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November 19, 2012

Court Gives Nod to FTC’s $22.5M Fine for Google

A U.S District Court Judge has approved the Federal Trade Commission’s (FTC) $22.5-million fine of Google over privacy complaints, rejecting a consumer-rights group’s appeal for a harsher punishment.

U.S. District Judge Susan Illston made the ruling late Nov. 16, just hours after final arguments in the San Francisco hearing.

Illston described the fine and other aspects of the settlement as “fair, adequate and reasonable.”

The fine is part of a settlement reached in August between the FTC and Google.

The $22.5-million civil penalty was in response to accusations Google broke a privacy policy by “improperly tracking Apple Safari users.” The penalty remains the biggest fine the FTC has imposed against a corporation for breaching a previous agreement with the agency.

A consumer-rights group, Consumer Watchdog, however, says the settlement is a case of inadequate regulation.

Consumer Watchdog says the settlement let Google off the hook because it allowed the search engine to “deny any liability for its conduct,” according to FTC Commissioner J. Thomas Rosch, who voted against the Google settlement, apparently had similar concerns. FTC Chairman Jon Leibowitz and three other FTC commissioners voted for the settlement “because they believe it will deter similar breaches in the future.”

Consumer Watchdog’s appeal of the settlement was a bid to bring more attention to the issue as the FTC wraps up a separate investigation of Google. The FTC has been investigating allegations for the past year that the firm manipulated search results to suppress its competition and increase online advertising prices.

The Federal Trade Commission is also investigating Google’s handling of patents it attained in its $12.5-billion deal to purchase Motorola Mobility in May, sources told the Wall Street Journal (WSJ).

It is alleged Google declined mobile device rivals’ patent licenses and obtained court injunctions against them to keep their products from being sold.

Google took over the pile of lawsuits Motorola launched against its competitors for impinging on its patents. Motorola also is being sued for declining to license patents. This has left various courts and agencies debating if Motorola’s patents are essential to certain technologies. If deemed essential, Motorola would be forced to license them.

FTC lawyers have threatened to charge the company under Section 5 of the FTC Act —which prohibits unfair or deceptive business practices —for using Motorola’s patents as ammunition against rivals such as Apple and Microsoft, the source told WSJ.