Google Inc (GOOG) and Privacy: 6 EU Countries Take Action

PARIS (AP) — Google Inc (NASDAQ:GOOG)‘s new privacy policy is under attack from regulators in its largest European markets, who on Tuesday brought legal action to try and force the company to overhaul practices they say let it create a data goldmine at the expense of unwitting users.

Led by the French, organizations in Britain, the Netherlands, Germany, Spain, and Italy agreed Tuesday on the joint action, with the ultimate possibility of imposing fines or restrictions on operations across the entire 27-country European Union.

Last year the company merged 60 separate privacy policies from around the world into one universal procedure. The European organizations complain that the new policy doesn’t allow users to figure out which information is kept, how it is combined by Google Inc (NASDAQ:GOOG) services, or how long the company retains it.

The fines’ financial impact on Google Inc (NASDAQ:GOOG) would be limited — French privacy watchdog CNIL has the right to fine the company up to 300,000 euros ($385,000), approximately the amount it earns in three minutes, based on its projected revenue of $61 billion this year. Britain can fine up to 500,000 pounds, but rarely does.

But successful legal action would hurt Google’s image and could block its ability to collect such data until it addresses the regulators’ concerns.

Google dominates the European market for Internet searches. According to one survey, as much as 95 percent of searches in Europe are carried out through Google Inc (NASDAQ:GOOG), compared with about 65 percent in the United States. European regulators have demanded specifics for anyone using Google on what’s being collected and a simpler presentation.

Tensions between privacy and the swiftly evolving ability of companies to spin online usage data into vast profits are ramping up, especially in Europe where privacy laws tend to be strong and nearly every country has a regulatory body. But Internet users have consistently shown a willingness to give up privacy in exchange for convenience and new online services that Google and other tech companies offer.

Google Inc (NASDAQ:GOOG) says it merged its myriad privacy policies in March 2012 for the sake of simplicity, and that the changes comply with European laws.