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Why the FCC Fined Google Just 68 Seconds in Profits

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The amount of the fine: $25,000. But that figure is barely a rounding error for the company. Google made $2.89 billion last quarter, or $25,000 in profits every 68 seconds.

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The Federal Communications Commission announced Friday it is slapping a fine on Google (GOOG) for deliberately impeding an investigation of the collection of sensitive wireless network data as part of the search giant's Street View mapping project. The amount of the fine: $25,000.

That figure is, of course, barely a rounding error for the company. Google made $2.89 billion last quarter, or $25,000 in profits every 68 seconds.
Nevertheless, the FCC Enforcement Bureau report announcing the fine says the $25,000 level is intended "to deter future misconduct in view of Google's ability to pay."

The FCC found that Google Street View cars, which were taking pictures for Google Maps, also collected passwords, email, and medical records, among other data, from residents' Wi-Fi networks. Google has apologized for collecting the data but maintains it was legal.

The report states that the FCC actually ramped up the fine. The base fine for the violations was $12,000.

The report also notes that the commission has elected to increase fines "[t]o ensure that a proposed forfeiture is not treated as simply a cost of doing business."

In the section discussing the size of the fine, a footnote points to Google's vast revenue:


Click to enlarge

The FCC could have levied a larger fine, but it still wouldn't have amounted to much for Google. As the report says, the maximum allowed by law for stonewalling the FCC's investigation as Google did is $112,500 per violation.

The report counts three violations by Google: "failures to identify employees, produce e-mails, and provide compliant declarations." So, the total fine could have been $337,500, or about 15 minutes of profits.

The report says the FCC decided on $25,000 based on "the totality of the circumstances of this case" and "our precedent in other failure to respond cases."

An FCC spokeswoman declined to comment on how the fine was calculated or how it would serve as a deterrent.

The company, for its part, disputed the FCC's findings in a statement: "We disagree with the FCC's characterization of our cooperation in their investigation and will be filing a response."

Google will have recouped the fine in less than the time it took you to read this.

Editor's Note: This article by Justin Elliott was originally published on ProPublica.org.
No positions in stocks mentioned.
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