Google stepped in it, again. The company was caught bypassing the privacy settings of those using Apple's Safari Web browser, which unlike other major browsers blocks third-party cookies by default. Google, like just about every other online company, relies on cookie files to improve ad relevancy, to identify users, and to deliver online services.

The Wall Street Journal, which Friday broke the story as part of its ongoing investigation into online privacy, reports that Google, along with at least three other advertising companies--Vibrant Media, WPP PLC's Media Innovation Group, and Gannett's PointRoll--"exploited a loophole in the browser's privacy settings" to place a cookie file on OS X and iOS devices such as iPhones using Safari.

The incident has prompted Consumer Watchdog, a consumer advocacy group critical of Google's privacy practices, to call for intervention from the Federal Trade Commission. Another consumer advocacy group, the American Consumer Institute, said, "Google’s willful disregard for the privacy choices of consumers and the privacy policies of Apple is a new low even for Google."

Google insists the Wall Street Journal report "mischaracterizes what happened and why." The company says it "used known Safari functionality to provide features that signed-in Google users had enabled" and that it did not collect personal information.

[ Google has been under fire for its planned privacy policy change. Read Google Rejects EU Request On Privacy Policy Consolidation. ]

Google hasn't helped its case by ceasing to use the HTML code that overrode Safari's default behavior. That looks like an admission of guilt. But let's step back for a moment and examine the situation.

The American Consumer Institute's contention Google willfully disregarded "the privacy choices of consumers and the privacy policies of Apple" isn't accurate.

Google disregarded the privacy choices of Apple, which chooses to block third-party cookies by default in its browser. And Google has nothing to do with Apple's privacy policies, which describe how Apple handles customer data.

Google argues that it manipulated Safari to resolve contradictory browser settings. Safari blocks third-party cookies by default. At the same time, Apple has implemented exceptions to Safari's third-party cookie blocking to allow social features like the +1 button to function.

Rachel Whetstone, SVP of communications and public policy, said in a statement that Google deployed its workaround code "to enable features for signed-in Google users on Safari who had opted to see personalized ads and other content--such as the ability to '+1' things that interest them."

The fact that other Google cookies got set, Google insists, was accidental. "The Safari browser contained functionality that then enabled other Google advertising cookies to be set on the browser," Whetstone explained. "We didn't anticipate that this would happen, and we have now started removing these advertising cookies from Safari browsers. It's important to stress that, just as on other browsers, these advertising cookies do not collect personal information."

Were it not for the fact that Google's advertising cookie opt-out help page stated explicitly that Safari's default setting was the functional equivalent of opting out, Google's explanation might suffice.

But rewind now to the July 2011 release of OS X Lion. With Lion came Safari 5.1, which included for the first time third-party cookie blocking by default.

Could Apple's decision to block third-party cookies by default have been influenced by its competition with Google, a company that depends on advertising and cookies?