Google was already under restrictions arising from a settlement with the FTC over practices employed by its now-defunct social network, Google Buzz. (I've mentioned that settlement, which cost Google a reported $8.5 million, here and here.)
Jon Leibowitz, Chairman of the FTC, commented on the Google settlement: “No matter how big or small, all
companies must...keep their privacy
promises to consumers, or they will end up paying many times what it
would have cost to comply in the first place.”
You can read the FTC's press release here, the Complaint here, and the Order here.