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FCC fines Google for hindering probe into street-mapping program

By Andrea Chang, Los Angeles Times –

LOS ANGELES — Google Inc. is facing a $25,000 fine for impeding a Federal Communications Commission investigation into the tech giant’s data-collection practices.

The world’s largest Internet search engine came under fire two years ago when it was revealed that its popular but controversial street-mapping program — in which Google’s cars snap photos of homes, intersections and other neighborhood features — was also picking up sensitive information from home wireless networks, including emails, passwords and Internet usage history. After initially denying any wrongdoing, Google admitted in a May 2010 blog post that “quite simply, it was a mistake.”

The FCC, which filed its 25-page report Friday, said despite Google’s apology and assertions that it did not intend to use the so-called payload data, the company has since “apparently willfully and repeatedly violated commission orders” during the probe, launched in late 2010.

“For many months, Google deliberately impeded and delayed the bureau’s investigation by failing to respond to requests for material information and to provide certifications and verifications of its responses,” the report said.

The agency also noted that the Mountain View, Calif., company had refused to identify the employees involved.

For Google, which last week reported first-quarter revenue of $10.65 billion, the $25,000 fine amounts to what the tech behemoth makes in about 18.5 seconds. In its report, the FCC said “given the totality of the circumstances of this case and our precedent in other failure-to-respond cases,” it found the $25,000 fine to be appropriate.

Despite the penalty, the FCC said the data collection, which occurred from May 2007 to May 2010, was technically legal because the information was unencrypted.

A Google spokeswoman said Sunday that the company would be filing a response but declined to comment on whether it would contest the fine.

“We disagree with the FCC’s characterization of our cooperation in their investigation,” she said.

Internet analyst Ray Valdes of research firm Gartner Inc. called the $25,000 fine “surprisingly small” but said the penalty would at least draw attention to privacy challenges in an increasingly digital world.

“I think here the primary impact is a symbolic impact,” he said. “It’s a persistent issue, not just with Google but with a lot of technology companies.”

In a recent statewide poll, the vast majority of Californians said they were worried about the data collected by smartphone and Internet companies, and most said they distrust even firms known for having tens of millions of daily users, such as Facebook.

Google’s Street View has received widespread criticism from the start, especially in Europe. Although many note the project’s usefulness, such as helping drivers visualize the place they’re going before getting behind the wheel or enabling users to virtually visit a place like the Amazon, Google’s cameras have also reportedly caught people urinating, picking up prostitutes and walking around naked.

Two years ago, a separate inquiry by the Federal Trade Commission into the Street View project closed without the agency taking action against Google.

In its May 2010 blog post, Google told users that as soon as it became aware that it was mistakenly collecting payload data, it segregated the data on its network, “which we then disconnected to make it inaccessible.”

The company has promised to delete the data; it has yet to do so because regulators still want to review it.

“The engineering team at Google works hard to earn your trust — and we are acutely aware that we failed badly here,” the company said at the time. “We are profoundly sorry for this error and are determined to learn all the lessons we can from our mistake.”

Google also pledged to ask a third party to review the software that was used to collect data, how it worked and what data it gathered. And the company said it had decided to stop its Street View cars from collecting Wi-Fi network data entirely.

An FCC spokeswoman said Sunday that the agency viewed the investigation as an opportunity to educate the public about the importance of encrypted data and would be releasing a consumer tip sheet Monday.

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