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Are Google's headaches early indicators of federal regulations online?

In a recent settlement with the Department of Justice (DOJ), Google gave up $500 million due to questions surrounding its advertising practices. This is one of the largest settlements ever in the U.S., according to the DOJ, and it might have larger ramifications: Could this be just the beginning of the federal government’s involvement in efforts to regulate the Internet?

Google was accused of allowing online Canadian pharmacies to place advertisements targeting U.S. consumers through its AdWords program — which the DOJ called “unlawful importation of controlled and non-controlled prescription drugs.” As a part of the settlement, Google has also agreed to “a number of compliance and reporting measures” to prevent similar violations.

The Google settlement with the DOJ follows other run-ins the company has had with federal regulators in 2011. In March, the company agreed to adopt a privacy program in response to charges that it deceived users and potentially violated user privacy when it launched the social networking service Buzz. In June, Google acknowledged that it was the subject of an FTC investigation examining whether it uses its Internet search dominance to stifle competition in expanding markets. The investigation is ongoing.

Google said in its Online Security Blog last week that it had received reports of attempted SSL “man-in the-middle attacks” against Google users, “whereby someone tried to get between them and encrypted Google services.” The issue affected users primarily located in Iran, but Google was quick to show transparency surrounding the potential security issue.

As Google expands its reach to areas including advertising and social networking, federal regulators must take increased notice. Data from research firm Nielsen showed that Google was by far the most popular online destination in July among Americans. According to Nielsen, 172.5 million unique visitors in the U.S. visited in July, and spent an average of nearly 1.5 hours on the site.

The increased scope and use of Google mirrors the increased scope and use of the Internet in people’s everyday lives. This trend will no doubt continue to lead to increased security vulnerabilities, and someone needs to mind the store. By monitoring and regulating the business practices of one of, if not the, most recognizable online brands, the government may be putting all Internet businesses on notice. More Internet-based businesses need to be aware of the security vulnerabilities, and hard and fast rules would make protecting consumers much easier.

With the increase in Internet use and time spent online, new compliance regulations will have to be adopted to adapt to the change in habits. The fed’s active role may be just the beginning.

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