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Google Facing DOJ Probe
May 13, 2011 by admin
Filed under Around The Net
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Google is under investigation by the U.S. Department of Justice concerning practices within its advertising program, and has set aside $500 million for a potential resolution fund, the company said in a regulatory filing on Tuesday.
In its quarterly report filed with the U.S. Securities and Exchange Commission, Google said that in May it accrued $500 million for the three-month period ended March 31, 2011 in connection “with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers”.
Although it cannot predict the ultimate outcome of the matter, Google said that it believes that it will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows.
The company did not explain why the charge had been taken retrospectively on its first quarter earnings. It is also not clear to whom Google would have to make the payment in the event of settlement.
Google declined to comment, stating that it was a legal matter. The company has updated its first-quarter results press release on its web site, to reflect the new charge.
‘Do Not Track’ Internet Legislation, Advances
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California is a moving closer to making into law the first Do Not Track legislation in the U.S., aimed at protecting Internet users from invasive advertising.
The proposed Senate bill, SB-761, passed a Senate Judiciary Committee vote late Tuesday, but it still has a long road ahead before having a chance of being signed into law. It now moves on to the Appropriations Committee, and must also pass the Senate and State Assembly before being sent to Governor Jerry Brown’s desk.
Still, it’s the first time such a bill has made it out of committee, and that’s a big deal, according to John Simpson, director of Consumer Watchdog’s Privacy Project. “This is the first time that a ‘do not track’ bill has actually had a hearing and been debated and then voted forward in the legislative process,” he said.
The bill would give California consumers a simple way of opting out of data collection systems that keep track of their online activities. “It puts up a no trespassing sign on our device,” Simpson said.
Opponents of the bill, including Google, the Direct Marketing Association, and the wireless industry group CTIA, say it puts an unnecessary burden on online commerce.
Online marketers love this type of data because it helps them fashion highly effective targeted advertising. But many consumers don’t want to hand marketers every detail of what they do on the Web.
Under the proposed law, users would have a way — possibly a through a browser setting — of telling Web sites not to track them. If a company disregarded this and collected data without permission, it could face stiff fines.