The federal agency said the technology giant had misrepresented its privacy policy about using tracking cookies or serving targeted ads for those users. In addition to the civil penalty, Google is required to disable all the tracking cookies it had previously said it would not install on consumers' computers.

'A Clear Message'

FTC Chairman Jon Leibowitz said in a statement that the "record setting penalty in this matter sends a clear message to all companies under an FTC privacy order." He added that every company, "no matter how big or small," must abide by the FTC orders and their "privacy promises to consumers, or they will end up paying many times what it would have cost to comply in the first place."

The FTC had charged that Google installed an advertising tracking cookie on the computers of Safari users over several months in 2011 and 2012. The users had visited sites that employ Google's DoubleClick advertising network . Previously, Google's policy had been that those users could automatically opt out of this kind of tracking, through the use of default settings in the Safari browser.

The agency contended Google informed Safari users that, as long as they did not change the default "Do Not Track" setting in the browser, the cookies would not be installed. Google is also a member of an industry network group, called the Network Advertising Initiative, which requires its member to police themselves and to disclose their data collection and use policies.

October 2011 Settlement

The FTC order that the agency said was violated was its October 2011 settlement with Google, which extends for 20 years. Its terms include provisions that prevent the technology company from misrepresenting the degree of control that consumers might have over their personal information. That settlement was primarily the result of charges that Google had used deceptive tactics and violated its own privacy promises in the launch of the now-defunct Buzz social network.

When set, Do Not Track is supposed to prevent cookies, or small tracking files, from being deposited on a user's computer by Web sites that have been visited. Tracking via cookies is widely used by advertising networks and some sites, in order to better accumulate data about the behavioral profiles of site visitors and to better target ads. (continued...)

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Recommended Reading: Search & Destroy: Why You Can't Trust Google Inc. Synopsis: This is the other side of the Google story. In Search & Destroy, Google expert Scott Cleland, shows that the world's most powerful company is not who it pretends to be. Google pretends to be a harmless lamb, but chose a full-size model of a Tyrannosaurus Rex as its mascot. Beware the T-Rex in sheep's clothing.