The fine pertains to data collected by Google between 2008 and 2010, which includes passwords, email addresses, browser histories and a range of other personal data.
“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,” said the company.
Google claims the data was collected accidentally through a bug in the Street View cars’ mapping software, and insists that none of it has been used.
Without admitting any illegal conduct or directly admitting wrongdoing, Google agreed to the fine and further conditions by way of a settlement of a legal challenge brought against the company by 38 US states.
One of the settlement conditions requires Google destroy the data collected.
The company will also have to conduct privacy and data use training for its employees for the next 10 years, as well as launching a public awareness campaign on how to most effectively protect online personal data.
The fine has been criticised as minimal, given that it will be divided between the 38 states, with many pointing out how small the fine is compared to Google’s financial situation - the company last year having posted a revenue for 2012 of US$50.2 billion and a net profit of US$10.7 billion.