Google defended its Internet practices, and although admitting to tracking users’ Web-surfing habits for online advertising purposes, the search giant explained in a response-letter sent to the House Energy and Commerce Committee that it does not deliver advertising based on deep-packet inspection.

The House Energy and Commerce Committee is currently inquiring the extent of a growing trend among Internet companies which tailor advertising based on consumers’ search, surfing and other Internet habits. Such practices have already incriminated NebuAd and other companies as well, and have raised a series of questions regarding the impact on consumer privacy.

In its letter, Google explained that although they understand that the questions posed to them and to other Internet companies concern a particular type of online advertising, they believe most online advertisers, just like Google, do not engage in such practices.

“The bedrock of our privacy practices are three design fundamentals: providing transparency, choice, and security,” Google said. Furthermore, they added that in order to “best innovate in privacy,” they are taking feedback from privacy advocates, government experts, users and stakeholders as well.

The search giant also stated its support for the adoption of a comprehensive federal privacy law meant to build consumer trust and protections, as well as create a uniform framework for privacy and establish penalties for “bad actors.”

Google admitted to providing online advertising based on consumers’ activities online through three products, AdWords, AdSense for Search, and AdSense for Content. However, “we strive to do this in a way that provides value to our users and protects their privacy.”

The search giant explained that any user can visit a Google website and use the search engine without providing them with any personal identifiable information.

Google retains the following data: standard server log information that includes the uniform resource locator, the Internet Protocol (IP) address associated with the computer or proxy server from which the request originated, the time and date of the request, the operating system that runs on the computer and the type of browser that runs on the computer.

Furthermore, Google said advertising is contextual, it involves no PII, is not provided by third parties and does not collect any information except for the basic information collected to provide search results. In addition to that, after 18 months, they proceed with the anonymization of unauthenticated search logs provided by users.

The company ended the letter by clearly stating: “Google does not correlate data regarding use across our products to offer advertising […] If we were to correlate data regarding use across our products to offer advertising, we know that we would have to do so in a way that protects the privacy and security of our users, and endeavor to which we are deeply committed.”

Last week, Google announced an opt-out capability for the Google content network and DoubleClick ad serving. On the same note, Yahoo revealed new opt-out choices for customers regarding advertising on Yahoo.com.