Google will pay $17 million to 37 states and the District of Columbia as part of a settlement over online tracking.
In a statement, attorney general of New York, Eric Schneiderman said Google violated not only users' privacy, but their trust as well.
Google said it stopped doing it after it was outed by the tech press.
The case is one of a growing pile of government investigations, lawsuits and punishments related to privacy matters at Google. It seems that the social networking tool called Buzz, illegal data collection by Street View vehicles and accusations of wiretapping to show personalized ads in Gmail still have not been resolved over the pond.
Schneiderman said that consumers should be able to know whether there are other eyes surfing the web with them.
We guess he means to exclude the NSA of course. Then you are not supposed to know at all and you should be arrested for mentioning it.
Google told Apple's favourite newspaper the New York Times that it worked hard to get privacy right at Google and has taken steps to remove the ad cookies, which collected no personal information, from Apple's browsers.
Google also agreed to avoid using software code that overrides a browser's cookie-blocking settings. It will have to have a web page explaining what cookies are and how to control them, and to ensure that the cookies tied to Safari browsers expire.