Will Google Buy Its Way Out Of Trouble For A Mere $7 million?
Reports were circulating in the tech press Friday that serial privacy violator Google is about to cut a deal with state attorneys general to close their investigation of the Wi-Spy scandal.
Remember what happened? Google sent specially equipped cars to travel the highways and byways of the world snapping photos of everything they passed. What Google did not say was that were also sniffing out Wi-Fi networks and sucking up private data on those networks.
They got passwords, account numbers and email messages, including in France a couple trying to arrange an extramarital affair.
When first confronted, Google executives denied sucking up the data. Then they said it was all a mistake. Then they said it was the work of a rouge engineer. Consumer Watchdog was among those to call on the Federal Trade Commission to investigate. The FTC did, but dropped the probe after Google essentially said, we'll be nice.
The Federal Communication Commission opened a probe ultimately fining Google $25,000 for hindering its investigation. The FCC also found that the Wi-Fi snooping had been deliberate and that senior managers had been aware of it. The FCC said it could not determine if the law had been broken because the engineer who designed the Wi-Fi snooping exercised is Fifth Amendment rights and declined to testify.
Google tried to spin the FCC probe by saying the commission found they had not broken the law. That's not what happened; the FCC said they could not determine if the law had broken. A big difference.
Meanwhile, under the leadership of then Connecticut Attorney Richard Blumenthal, more than 30 state attorneys general launched their investigation of the incident, which is really the largest case of wire tapping in history.
It's that state attorneys general probe that is reportedly about to be settled for $7 million. That may sound like a lot, but it's not even pocket change to the Internet giant, which made $10.7 billion profit on revenues of $50.2 billion in 2012. Divide the fine among the states and it comes out to about $230,000 for each.
I asked Susan Kinsman, spokesperson for Connecticut Attorney General George Jepsen, now heading the investigation, about prospects for a deal. She said, "I spoke to our attorneys for a status report. As we've stated before, the Google investigation is active and ongoing. I can't comment about any prospect for a settlement."
Nonetheless, there are enough sourced reports out there, focusing on the $7 million deal that it sounds like it's accurate. It was probably leaked on Friday by Google itself. That's the way they usually play the PR game. By the time the settlement is officially announced it will be old news.
What's important, by the way, is not the measly $7 million fine. It's understanding what's really happening. Once again it looks like Google, the serial privacy violator, is buying it's way out of a jam with what for the Internet giant is pocket change.
We'll need to see what other provisions the settlement contains. Will the state attorneys general give Google the same sort of pass that the FTC did when it allowed Google to explicitly deny it broke the law in the Safari hacking scandal and charged Google $22.5 million? What will happen to the data Google sucked up? Will there being any meaningful injunctive relief? Given Google's record of repeated privacy violations and of bamboozling regulators, I'm not optimistic that much of anything significant will emerge.
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