SAN FRANCISCO, CA—In the US District Court for Northern California this morning, federal Judge Susan Illston heard arguments from Consumer Watchdog, a nonprofit consumer group which filed an amicus brief questioning the FTC’s recent settlement with Google over cookies implanted on Safari browsers without consumers’ knowledge. In August, the Commission settled with Google for $22.5 million—the largest FTC settlement for any company so far. But Consumer Watchdog says that settlement wasn’t enough, and Google must admit guilt and be ordered to expunge the data it collected from Safari users during the period in question.

Update: Later this afternoon, Judge Susan Illston approved the $22.5 million settlement without conditions, calling it "fair, adequate and reasonable," according to the Mercury News.

In a memorandum posted prior to the hearing this morning, Consumer Watchdog suggested that a suitable penalty for Google’s improper tracking would be an astronomical $3 billion. "An independent analyst, using the most conservative assumptions possible, estimated the statutory penalty at $8 billion," the memorandum also read. The absurdly high numbers were not mentioned at all in today’s hearing.

The hearing was brief and the judge seemed skeptical toward Consumer Watchdog’s opposition to the proposed order. Still, Judge Illston asked a few pointed questions of the FTC’s and Google’s lawyers regarding the continued use of the data that Google collected.

"My preliminary view is to grant the request to approve the order [for the settlement between the FTC and Google]," she said before questioning the FTC’s counsel on why Google was allowed to keep the improperly collected data.

"The Commission considers Consumer Watchdog’s concern [that Google will continue to use its improperly collected data] to be unlikely, because old data is of negative value," the FTC’s counsel replied, saying that if a customer searched for a sofa six months ago and Google continued to use that information, the company would have to keep serving up ads for sofas, even though the ad might be irrelevant.

"I guess it’s not a risk writ large, but it's really annoying for a consumer to get ads for sofas on the screen,” the judge responded.

Google’s counsel then told the judge that the search giant’s policy is to anonymize IP addresses after nine months, rendering the usefulness of the information collected by the cookies negligible. "Concern about reassociation of data is neither realistic or feasible," Google’s lawyer said. "IP addresses are dynamic, they change over time. It would not be a practical or useful exercise for Google" to reassociate the information they collected, the counsel said.

The FTC did not fine Google for illegally collecting data, but rather for violating an earlier consent decree that the company had signed after Google was caught using consumer data to populate Google Buzz. In it, Google promised not to use consumer data outside of the company without the consumer's knowledge.

After the judge heard from both sides, Consumer Watchdog's lawyer Gary Reback discussed the advocacy group’s expectations with reporters outside the courtroom. Reback made his name in the '90s by launching the antitrust case against Microsoft, similarly filing an amicus brief questioning an FTC settlement with the software company. While it was unlikely that the judge would do anything but approve the FTC settlement with Google, Reback said he hoped she would add conditions to the approval, perhaps ordering the company to expunge the data it collected from Safari users, or at least asking it to admit guilt.

Even if she doesn’t do that, Reback said, he hoped Consumer Watchdog would challenge the FTC’s way of doing things. "The FTC seems to think that it can resolve Google’s antitrust issues simply by a consent decree," Reback said. "And we want to make it clear that that’s not a good procedure. It doesn’t seem to work very well, and it doesn’t seem to police Google very well."

Reback’s experience with Microsoft’s antitrust case is also clearly coming into play again with Google’s impending antitrust case with the FTC. "I wanted a courtroom where the government and Google were at the same table, hand in hand, and somebody is challenging them," Reback said. "Because when I did the Microsoft case, that was the turning point. When the government had to sit at the same table with Microsoft and defend them… I wanted the commissioners to feel the cosmetics if you will, the presence of the government defending Google’s conduct in litigating against a consumer protection agency. I wanted to know if they feel proud of that."