Google (Nasdaq: GOOG), the No. 1 search engine, will pay a record fine of $22.5 million to the U.S. Federal Trade Commission to settle a complaint it had abused the privacy of users of the rival Safari browser from Apple (Nasdaq: AAPL), the world's most valuable technology company.

The penalty is the largest ever paid to the FTC. Google, of Mountain View, Calif., reported second-quarter cash and investments exceeding $43.1 billion.

The FTC alleged Google has illegally inserted software "cookies" on Safari users of Apple iPhones who visited Google's DoubleClick advertising network "for several months in 2011 and 2012." Google had advised them that they would be automatically opted out of advertising tracking, though.

"No matter how big or small, all companies must abide by FTC orders against them and keep their privacy promises to customers," said FTC Chairman Jon Leibowitz. If not, "they will end up paying many times what it would have cost to comply in the first place."

David Vladeck, director of the FTC's Bureau of Consumer Protection, said Google will be strictly followed and could face higher penalties for future infractiions. He also said the search engine and smartphone maker remains under investigation by "other bodies" in both the U.S. and aborad for alleged infractions of privacy and other practices.  He declined to elaborate.

Google isn't the only company to have settled such charges: Last year, Facebook (Nasdaq: FB), the No. 1 social networking site, agreed to desist from cookie inserts and to be monitored by the FTC for 20 years.

In May, MySpace, now a unit of private Specific Media, which acquired it from Rupert Murdoch's News Corp. (NYSE: NWS), agreed to a similar settlement for abusing the site's Friend ID function.

Google isn't a first offender, Vladeck said. Previously, it acknowledged violating individual privacy rights when it used cameras to collect data for its StreetView function that enhances Google Maps. It also misappropriated user privacy on its Google Buzz social networking site that was discontinued completely this year, about eight months after the company launched Google+.

"The company said, 'We didn't know. We didn't realize. We didn't know what was going on,' " Vladeck said, "That raises a red light to regulators." He said the company will have until early 2014 to comply with the FTC settlement, although it appears to have already removed most of its tracking cookies.

The Google settlement may send a mixed message to both companies and consumers, said Marc Roth, a partner with Manatt, Phelps and Phillips in New York, who once worked as an FTC lawyer. Because Google has signed a consent decree, it will be nearly impossible for a consumer to bring a lawsuit alleging damages, he said. And as a three-time offender, Google and other seems to in the habit of abusing privacy.

Still, "For a company the size of Google, an action like this hurts," Roth said. "It hurts the reputation of the company and needs to be reported." As well, Google is also known to be under investigation for other practices by the U.S. Department of Justice as well as the European Commission, which ought to trigger best behavior, he said.

Roth, who'd been a chief compliance offer for magazines within the Time Warner Inc. (NYSE: TWX) group, said Google and other sites need to respect customer preferences and privacy, noting that abuses are being reported by university professors and students as well as being discovered by the FTC. Those tools are sufficient for now, he said.

Google shares rose 12 cents to $642.35 after the settlement was announced on Thursday. Earlier, they reached $646.37.

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