Google Privacy Changes Must Be Stopped, Argues Lawsuit Seeking FTC Action

Google Inc. (GOOG)’s planned changes to its privacy policy violate a consent order signed with the U.S. Federal Trade Commission last year and should be blocked, a Washington advocacy group said in a lawsuit.

Google’s plan to streamline privacy settings for some 60 different services and products on March 1 would allow the company to combine more information about users, reduce users’ control of their own data and give more personal information to advertisers, the Electronic Privacy Information Center said. The group seeks to compel the FTC to enforce the consent decree.

The lawsuit’s demands on the agency could trigger a regulatory challenge to Google’s business practices at a time when the FTC is already cracking down on how Internet companies collect and use consumer data.

The agency’s 2011 settlement with Google over privacy, which barred sharing user data outside the company without clear permission, stemmed from a complaint filed by the advocacy group in 2010.

“To date, the FTC has failed to take any action with respect to Google’s privacy changes,” Marc Rotenberg, executive director of the group, said in the complaint filed today in federal court in Washington. “The consolidation of customer information across Google services is a clear misappropriation of customer information, and presents a great threat to consumer privacy.”

No Changes

Chris Gaither, a spokesman for Google, said the complaint by the group, known as EPIC, “is wrong on the facts and on the law.” He said Google’s new privacy policy doesn’t change how any personal information is shared outside of Google and that the company has given users “ample time” to understand the changes.

“We’ll continue to offer choice and control over how people use Google,” Gaither added.

Cecelia Prewett, a spokeswoman for the FTC, said, “We take compliance with our consent orders very seriously and always look carefully at any evidence that they are being violated.’

The agency last year settled privacy complaints with Facebook Inc. and Twitter Inc.

Google, the world’s most-popular search engine, announced plans on Jan. 24 to unify privacy policies for products including YouTube videos and Android software for mobile phones, saying it will simplify conditions users agree to.

Data Collection

That also means Google will be able to pull together everything it knows about users from its disparate products. A consumer’s YouTube viewing history can be used to tailor results in Google Search while an individual’s search history will enable more relevant ads across Google products, Gaither said.

Users will benefit from such functions as adding an appointment to their calendar from a Gmail message or reading Google Docs within Gmail, Gaither said

EPIC claims in its lawsuit that the changes will let advertisers gain access to increased amounts of personal information. Gaither said that’s incorrect.

Google, amid growing competition from Facebook Inc.’s social networking service, is seeking increased revenue from advertisements served up on the basis of personal interests garnered from Internet and mobile phone activity.

Competition for Ads

Facebook wrested the lead in U.S. online display ads from Yahoo! Inc. in 2011, taking a 16.3 percent share, according to researcher EMarketer Inc. Google remained in the No. 3 spot with 9.3 percent last year.

Under the consent decree announced March 30, Mountain View, California-based Google agreed it used deceptive tactics and violated its own privacy policies when it introduced its Buzz social-networking service in 2010.

The 20-year settlement bars Google from misrepresenting how it handles information and obliges the company to follow policies that protect consumer data in new products.

Google’s new privacy policy is also under review by data- protection agencies in Ireland and France.

Google’s settlement with the FTC stems from a Feb. 16, 2010, complaint filed by EPIC. The center asked the FTC to investigate whether the Buzz harmed consumers when it automatically revealed private e-mail contacts from Google’s Gmail service to other Buzz members.

The FTC has authority to levy fines of as much as $16,000 a day for each violation of the consent decrees.

The case is Electronic Privacy Information Center v. Federal Trade Commission, 12-00206-ABJ, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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