France Slaps Google With First Fine Over Street View

The fine that French privacy authorities levied today against Google (NSDQ: GOOG) won’t amount to more than lunch money for the search giant-it’s 100,000 euros, or about $142,000. But it is the biggest punishment ever issued by this particular agency, and it’s the first actual fine over Google’s most public privacy breach, in which Street View cars mistakenly collected private data from users that was being transmitted over unencrypted WiFi networks. More than anything, the move shows that French government agencies will continue to be among the world’s most aggressive when it comes to meting out punishment to Silicon Valley companies.

The French privacy agency (Google-translated link) found that the fine was appropriate because of the “economic benefits” that accrued to Google because of Street View and that allowed it to acquire a “dominant position in the field of location services.”

That seems like muddled logic, to say the least. The only data that is to Google’s benefit is the public data about where WiFi networks are located, which should be legal to collect, even in France. The privacy breach involved going past that and collecting actual information that was flowing over some of those networks. That data is useless to Google economically and its collection has unquestionably harmed the company; in fact it’s clearly hurt Google in the geolocation space, where it has competitors such as Skyhook.

Google can appeal the fine, but it isn’t clear whether it will do so. The data collected included passwords, web browsing histories, and banking information. Google has said it will delete the information.

According to the AP, more than 30 countries have complained about the Street View blunder, but none have yet issued fines except for France.

At times, France has shown its willingness to impose punishments for behavior that is perfectly legal in the U.S. A French court slapped eBay (NSDQ: EBAY) with a fine of more than $50 million back in 2008, after finding that the company didn’t do enough to fight the selling of counterfeit goods bearing the logo of luxury goods maker LVMH. Yet multiple U.S. courts looked at very similar claims brought by Tiffany’s and found that eBay was in the clear.

Google has apologized for the Street View privacy breach and called it a “mistake.” In the U.S., the Federal Trade Commission opened an investigation over the issue, but closed it without punishing the company. But attorneys general from several states continue to investigate the mishap.