The search giant triggered a fierce user backlash when it integrated Buzz into its Gmail e-mail service in February 2010. The service automatically created public circles of friends for users based on their most frequent Gmail contacts. But many users complained that they didn't want all their e-mail contacts -- which could include ex-spouses, doctors, employers and recruiters -- to become part of a social network for anyone to see.
The settlement announced Wednesday with the Federal Trade Commission requires Google to study both its existing services and any new services it launches to determine if they pose risks to user privacy -- and develop policies to address those risks if they do.
"When companies make privacy pledges, they need to honor them," FTC Chairman Jon Leibowitz said in a statement.
The FTC complaint outlined a number of problems with Buzz. Those included ineffective options to let users decline to participate in the service, confusing and hard-to-find controls to let users limit sharing of their e-mail contacts, and inadequate notice of exactly what the service did.