By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc will pay $17 million to settle allegations by 37 states and the District of Columbia that it secretly tracked Web users by placing special digital files on the Web browsers of their smartphones.
The deal, announced Monday morning, ends a nearly two-year probe by the states into allegations that Google bypassed the privacy settings of customers using Apple Inc's Safari Web browser by placing "cookies" into the browser.
Cookies are special files that allow websites and advertisers to identify individual Web surfers and track their browsing habits.
The Safari Web browser used on iPhones and iPads automatically blocks third-party cookies, but Google altered the computer code of its cookies and was able to circumvent the blocks between June 2011 and February 2012, according to the states' allegations.
Google, which did not admit wrongdoing in the settlement, said on Monday that it has "taken steps to remove the ad cookies, which collected no personal information, from Apple's browsers."
The company agreed to pay $22 million in August 2012 to settle a probe by the U.S. Federal Trade Commission relating to the same matter.
Google, the world's No. 1 Internet search engine, generated revenue of some $50 billion in 2012, mostly through advertising.
Under the terms of Monday's deal, Google agreed not to use the type of code capable of overriding browser settings without user consent, unless for security, fraud or technical issues. It also agreed to provide consumers with more information about cookies for the next five years.
(Corrects to add dropped word "Columbia" in first paragraph)
(Reporting by Alexei Oreskovic; Editing by John Wallace)