Google Burned By Partners To The Tune Of $22.5 Million

Written by Frank Hayes
July 11th, 2012

Hidden in Google’s $22.5 million deal with the FTC to settle a Web-privacy failure involving Apple users is a reminder to online retailers about just how messy the E-Commerce game is: Lots of players are involved in every transaction, and any one of them can change the rules at any time.

Sure, this fine is chump change to Google, few customers care much about privacy anyway and you’re not Google. But the same dynamic could leave security holes in any E-Commerce site, especially because your carefully vetted procedures can get sidestepped as soon as an emergency fix is required—and any glitch qualifies as an emergency.

The deal, which has been finalized but still awaits approval by the five FTC commissioners, involves the biggest Web-privacy fine the agency has ever levied, according to a report in The Wall Street Journal on Monday (July 9). That’s not saying much, because the FTC has only gone after a limited number of privacy violators (and it recently announced its first-ever effort to go to trial on a payment-card breach case). The problem: The FTC can’t pursue actual privacy violations, only cases where a business fails to observe its own published privacy policy.

That’s what got Google into this specific mess. The search giant had posted a privacy page in 2009 saying that it would respect the privacy settings of each user’s browser. In 2010, after Apple—whose Safari is the only major browser that rejects third-party cookies by default—tweaked the way Safari handles cookies to make forms work better, some enterprising Google developers tweaked their own code to make Google’s “+1” button work. That also opened a hole for third-party ad companies to put their own cookies on the Safari user’s machine, which Google didn’t spot and block.

Now count the players: Google, Apple, Google’s developers and multiple third-party advertisers. Apple didn’t trumpet its Safari changes; the advertisers didn’t announce what they were doing. Google is the one with the published privacy policy, so it’s the one the FTC went after. But the privacy breach never would have happened without Apple and the advertisers.

Online retailers have privacy pages, too, along with partners capable of making changes that open privacy holes. But you probably aren’t much worried about the FTC (though maybe you should be, now that it’s finally starting to show some teeth). Most customers care about privacy even less than they care about whether a retailer has had a payment-card breach—that just doesn’t seem to change their store-going habits.

But the same dependencies that did in Google—those third-party connections and developer obliviousness—could hit chains much harder in an area they do care about: PCI.

Plan on using some vendor’s cloud? It’s probably not PCI-safe. You don’t even know where the data actually resides, never mind how it’s secured or what changes could be made on a moment’s notice (or no notice at all).


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