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Google has reached a peanut-sized $7m settlement with 38 US states, after its controversial Street View prowl cars deliberately collected payload data including emails and passwords from unencrypted Wi-Fi networks across America.

The company said in a statement that it was pleased to have inked an agreement with Connecticut Attorney General George Jepsen, who led an eight-state executive committee probe into the way Google's cars intercepted sensitive data around the globe.

Consumers have a reasonable expectation of privacy. This agreement recognises those rights and ensures that Google will not use similar tactics in the future to collect personal information without permission from unsuspecting consumers.

Google had previously coughed to wrongdoing but declined to name the engineer supposedly responsible for the wireless data slurping that happened in many countries around the world and went unchecked for several years.

The mysterious "Engineer Doe" at the heart of the affair was later revealed to be YouTube coder Marius Milner.

Google said in an official statement regarding the $7m fine:

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. The project leaders never wanted this data, and didn't use it or even look at it.

In April last year, Google claimed to the US Federal Communications Commission (FCC) that protecting the identity of the engineer responsible for the Street View data slurp had no consequences for the watchdog's investigation.

That probe ended with the FCC fining Google $25,000 for impeding its inquiry and concluded that some execs at Mountain View must have known about the data slurp.

Because the data scooped up by Street View had been unencrypted, the Commission ruled at the time that Google's actions could not be considered illegal under the US Wiretap Act. Instead the company received only a paltry financial penalty for hampering the Feds' 18-month-long investigation.

Under the multi-state agreement Google signed with Jepsen on Tuesday, the company is required - among other things - to undertake a comprehensive employee education scheme about user data privacy and confidentiality. It is also expected to "eventually destroy" the data its Street View fleet of cars hoovered up "between 2008 and March 2010".

There has been a worldwide outcry against Google's wireless packet hoarding, but so far the complaints are yet to result in any fines or penalties which might actually bother the vast advertising operation. France, for example, slapped a €100,000 penalty on the company.

Here in the UK, the Information Commissioner's Office re-opened its own investigation of Google's Street View tech in June 2012 after the FCC concluded that it seemed "likely that such information was deliberately captured" by the prowling surveillance cars. ®

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