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Google to pay $22.5 million for breaching privacy on Apple’s Safari browser

Google, however has said the whole affair was a ‘mistake’ and said it has discontinued the practice of placing unauthorized cookies on users’ machines

US Federal Trade Commission (FTC) has directed Google to pay $22.5 million for violating consumer privacy settings on Apple’s Safari browser. It is the largest civil penalty ever assessed by the FTC for violating its order. What irked the Commission was that Google said that the privacy violation was not deliberate.


Google has said the whole affair was a ‘mistake’ and said it has discontinued the practice of placing unauthorized cookies on users’ machines as soon as the Wall Street Journal published a story about it.


However, David Vladeck, Director of Consumer Protection at the FTC said, “I think that defence raises red flags to regulators.”


“Their intent is immaterial. It’s troubling to us that Google says they didn’t know it was going on. A company like Google is the steward of personal information from hundreds of millions of people and they have to do better,” Vladeck added.


In addition to the civil penalty, the FTC order also requires Google to disable all the tracking cookies it had said it would not place on consumers’ computers. 


In the conference call, James Kohm, Associate Director for Enforcement at the FTC, said that most of the illicit cookies have already been removed but said that under the terms of the order, Google has until 15 February 2014 to remove all of them. “The extra time is because they can only remove the cookies when somebody visits a site in their ad network,” Kohm said.


It’s the latest in a long series of ‘accidental’ privacy violations by Google. It pales in comparison to the so-called “Wi-Spy” case in 2010, when Google admitted it invaded Wi-Fi networks and downloaded private data from those networks as its fleet of gadget-encumbered cars crept through neighbourhoods around the world, collecting information for its street-mapping project.


The Commission in April fined Google $25,000, saying it was obstructing the agency’s investigation of the matter. As usual, Google said any such obstruction was inadvertent. It didn’t apologize.


Last year, in a settlement with the Justice Department, Google agreed to pay a $500 million penalty for promoting and advertising unlawful sales of prescription drugs through its ubiquitous AdWords program. It said its role in establishing a global network of illicit drug sites was unintentional.


Responding to queries about whether the penalty was adequate, Vladeck said Google was “paying a heavy price.”


“$22.5 million may not seem like a lot of money to Google but given the magnitude and duration of this violation, we think it's quite substantial,” he said. “We have Google under order for another 19 years and this sends a message that the FTC isn’t kidding around,” he added.


In its complaint, the FTC charged that for several months in 2011 and 2012, Google placed a certain advertising tracking cookie on the computers of Safari users who visited sites within Google’s DoubleClick advertising network, although Google had previously told these users they would automatically be opted out of such tracking, as a result of the default settings of the Safari browser used in Macs, iPhones and iPads.


According to the FTC’s complaint, Google specifically told Safari users that because the Safari browser is set by default to block third-party cookies, as long as users do not change their browser settings, this setting “effectively accomplishes the same thing as (opting out of this particular Google advertising tracking cookie).”  In addition, Google represented that it is a member of an industry group called the Network Advertising Initiative, which requires members to adhere to its self-regulatory code of conduct, including disclosure of their data collection and use practices.


The FTC charged that Google’s misrepresentations violated a settlement it reached with the agency in October 2011, which barred Google from—among other things—misrepresenting the extent to which consumers can exercise control over the collection of their information.  The earlier settlement resolved FTC charges that Google used deceptive tactics and violated its privacy promises when it launched its social network, Google Buzz.


(Courtesy: James R Hood)


Read the original article here: Google Pays $22.5 Million for Privacy Violations


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SEBI planning extensive reforms in IPO, MF rules

The SEBI Board in its meeting on 16th August is likely to discuss regulations for mutual funds and IPOs, including a 'safety net' guarantee and tax incentives for new investors

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) will consider this week wide-ranging reforms in its regulations for mutual funds and initial public offers (IPOs), including a 'safety net' guarantee and tax incentives for new investors, reports PTI.
Various proposals expected to be discussed and approved at the upcoming board meeting of SEBI on 16th August also include introduction of e-IPO, which would allow investors to bid for IPO shares electronically and without any physical paperwork.
According to a senior official, the key proposals for reforms in primary market include introduction of a 'safety net' guarantee for the investors buying shares through IPOs.
As per the proposed mechanism, a certain portion of the investment made by retail shareholders in the IPOs could be guaranteed for a fixed period, which could of six months, even if the shares' value plunge below the IPO allotment price during this time.
This 'safety net' mechanism is being considered only for the small retail investors, who would be compensated by the promoters and other entities selling shares through IPOs in the event of the company's shares plunging below a certain threshold limit within six months of listing or the time frame set by SEBI, sources said.
As per the current regulations, the companies are allowed to provide such 'safety nets' during their IPOs, but it is not mandatory for them to make such provisions and only a few companies have provided such facility for investors in the past.
SEBI is of the opinion that a mandatory 'safety net' provision would also help in fair pricing of IPOs, besides providing investors some sort of capital protection guarantee.
Many companies and investment bankers have come under the criticism of over-pricing of IPOs after their shares fell below the public offer price levels in several cases.
Sources said the companies could be allowed to pass on the costs of 'safety net' provision to the investment bankers, who are primarily responsible for fixing the price of shares to be sold through IPOs. 
At the upcoming board meet, SEBI is also likely to discuss a new definition for 'small or retail investors' as there are some ambiguity in current regulations.
For IPOs, the investors putting in up to Rs2 lakh are considered retail investors, while already listed companies distinguish small and large individual shareholders as those holding shares worth up to Rs1 lakh and those holding shares worth more than Rs one lakh, respectively.
For mutual funds, the regulator will consider giving the fund houses flexibility in using their expense ratio. At present, the fund houses are required to divide their expense ratio (an amount deduced from investors' funds) as per a fixed formula between the fund management fees and other expenses.
There have been demands from some section of the mutual fund industry to allow levying an additional charge of 2% from investors. However, the demand has faced opposition from within the industry and was being seen as return of the controversial entry-load (a charge levied on new investors), which was scrapped by SEBI in 2009.
The introduction of any fresh charge could be seen as an anti-investor move and therefore SEBI is not very comfortable with any such idea, the official said, while adding that there could be certain tax incentives to attract investors to mutual funds, while measures would be discussed to help the mutual fund distributors as well.
In his first press conference after taking over as the country's new Finance Minister, P Chidambaram had also said last Monday that a number of decisions would be taken soon to encourage more people to invest in mutual funds, insurance policies and other instruments.
A major tax incentive proposal relates to the stock investments as well, as SEBI would consider finalising the fine prints of Rajiv Gandhi Equity Scheme, which was announced in this year's Union Budget and provides for tax benefits to first time investors in the stock market.
Besides, SEBI is also considering changes in the profitability eligibility criteria for companies allowed to come out with IPOs, while some changes could be made in follow-on public offer (FPOs) and other methods of share sale by already listed companies.


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