Google Inc. (GOOG) FTC Settlement Challenged by Consumer Group

Google Inc (NASDAQ:GOOG)

Google Inc. (NASDAQ:GOOG) just can’t seem to write the $22 million check to the Federal Trade Commission and be done with its privacy violation charges. Two weeks after the FTC submitted a $22.5 million settlement deal to a federal court in San Francisco, a consumer-advocacy group has steeped forward and file a motion requesting the opportunity to file briefs challenging the settlement, which the group says is not in the “public interest” because the deal does not stipulate that Google Inc. (NASDAQ:GOOG) is guilty or should be held liable for its actions in the case, which involved the installation of cookies on Apple Inc. (NASDAQ:AAPL) Safari browsers.

Google Inc. (NASDAQ:GOOG) reached the $22 million settlement deal with the FTC  earlier this month and the court only had to sign off on the deal. The civil fine is the largest ever handed out by the FTC for a privacy violation. But Consumer Watchdog, a consumer0advocacy group, is challenging the settlement on the grounds that because Google is not left liable, the settlement is not in the public interest, which is a key factor in the court approving the deal. The group has asked Judge Susan Illston to grant the group “friend-of-the-court status so it can file briefs and request a hearing on the proposed deal.

“We ask that the Court take the opportunity to establish a briefing schedule commensurate with the importance of this case. The parties provided no briefing to the Court at the time they filed these motions. Other courts, in similar circumstances, have required the parties — the FTC, in particular — to fully brief the numerous important issues before the Court, including, principally, how the ‘public interest’ standard is satisfied by the FTC’s actions,” the motion reads.

Google Inc. (NASDAQ:GOOG) got in trouble with the FTC over a violation of privacy rules. Google had indicated to users that it would not place cookies on iPhones that used the Safari web browser that is proprietary for Apple Inc. (NASDAQ:AAPL). However, while Safari had thedefulat setting to block all cookies, somehow a large number of Google cookies were able to bypass the settings, and Google Inc. (NASDAQ:GOOG) also placed ads, again deceiving Safari users, the FTC claimed.

While the fine is historically large, it is just a small fraction of the $38 billion in revenue Google Inc. (NASDAQ:GOOG) made in 2011. While the money is no big deal, the public-relations effort Google Inc. (NASDAQ:GOOG) is having to make is likely affecting users of Google products, as well as investors like Chase Coleman of Tiger Global Management.