March 12, 2013 at 2:18 PM ET
Google has agreed to pay $7 million to settle a lawsuit filed by 37 states and the District of Columbia over the firm’s vacuuming of data from home Wi-Fi networks around the world. The settlement ends a long chain of U.S. government legal actions against Google in what has become known as the "Wi-Spy" scandal, but Google still faces numerous legal challenges in Europe and elsewhere.
Between 2008 and 2010, Google's Street View cars, designed to take detailed block-by-block pictures, had an added feature -- they collected data broadcast out of users' homes from unsecured Wi-Fi networks. At the time, most home routers didn't come equipped with encryption by default, so the data haul was enormous, and raised numerous privacy issues.
Google has admitted its mistake, but maintained that the collection wasn't illegal because the data was collected from public locations and broadcast by the victims in plain text. Still, the episode has been embarrassing for the company, and it has repeatedly said it has implemented new procedures to prevent a similar episode.
The most disturbing part of the Wi-Spy scandal is that Google blames it on a rogue engineer, though according to an investigation conducted by the Federal Communications Commission, the engineer told others at the company about the data collection. It's alarming to think about the privacy disasters that could be created by a rogue employee or group of employees who work inside a company with massive data collection power, like Google. The FCC fined Google $25,000 for allegedly obstructing its investigation, but took no further action against the company.
“Consumers have a right to protect their vital personal and financial information from improper and unwanted use by corporations like Google,” said New York Attorney General Schneiderman in a statement about the attorneys general settlement. “This settlement addresses privacy issues and protects the rights of people whose information was collected without their permission. My office will continue to hold corporations accountable for violating the rights of New Yorkers.”
Google agreed to destroy the data as part of the settlement and to launch an employee privacy training program that it must continue for 10 years.
"We work hard to get privacy right at Google. But in this case we didn't, which is why we quickly tightened up our systems to address the issue," Google said in a statement to NBC News. "The project leaders never wanted this data, and didn't use it or even look at it. We're pleased to have worked with Connecticut Attorney General George Jepsen and the other state attorneys general to reach this agreement."
The Electronic Privacy Information Center maintains a detailed list of legal actions in the Wi-Spy scandal, including links to details on ongoing investigations around the globe.
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