Google has agreed to pay the largest fine ever imposed on a single company by the US Federal Trade Commission.
The firm agreed to pay $US22.5 million after monitoring web surfers using Apple's Safari browser who had a "do not track" privacy setting selected.
The BBC reports Google did not have to admit wrongdoing as part of the settlement.
The penalty is for misrepresenting what it was doing and not for the methods it used to bypass Safari's tracker cookie settings.
Cookies are small text files that are installed on a computer to allow it to be identified so that a user's web activity can be monitored.
The FTC began an inquiry after a Stanford University researcher noticed the issue while studying targeted advertising.
He revealed that Google was exploiting a loophole that let its cookies be installed via adverts on popular websites, even if users' browsers' preferences were set to reject them.