It has been reported that Google is currently negotiating with the Federal Trade Commission (FTC) regarding the size of the fine it will have to pay as a result of its alleged use of cookies to override the privacy protections that are incorporated in Apple Inc.’s Safari Internet browser.

Cookies are small text files that can be used by browsers to record online activity. Online behavioral advertising cookies track Internet users across websites to create profiles of user preferences to target advertising to more receptive audiences. By default, the Safari browser does not permit third parties to place cookies on web pages and, therefore, blocks online behavioral advertising cookies. Google’s cookies allegedly allowed Google to bypass Safari’s built-in privacy protections to aim targeted advertising at users of Safari on computers, laptops, iPhones and iPads. According to Google’s Vice President, Google did not "anticipate that this would happen and . . . [has] now started removing these advertising cookies from Safari browsers.”

Google may face a fine if the FTC views its activities as a breach of its 2011 consent decree with the FTC. The consent decree – which came after the announcement of Google Buzz – maintains that Google must not misrepresent any of its privacy, security, or compliance policies or programs. If it is determined that Google has used cookies as an inadvertent override of Apple’s Safari browser, the FTC may deem this a breach of the consent decree.

This case illustrates that companies need to audit their use of cookies to understand what their cookies are actually collecting and how they are obtaining that information. Many companies do not fully appreciate the mechanics of how cookies are obtaining the information when they decide to use cookies created by third parties. All companies that use online behavioral advertising to target their advertising to specific groups of consumers should be aware of the FTC’s enforcement in this area. Some mechanisms – such as tracking technology – may lead to the unwanted attention of the FTC and result in more harm than the advertising is worth.

Arent Fox is continuing to monitor this and other privacy-related issues. Please contact Anthony V. Lupo, Sarah Bruno or Eva Pulliam with questions.