The Information Commissioner's Office has changed its mind about Google's Street View and decided that it is after all in breach of the Data Protection Act.
The watchdog will require Google to sign a piece of paper promising not to break the law again.
The ICO will also audit Google's privacy practices.
Information Commissioner Christopher Graham said: "It is my view that the collection of this information was not fair or lawful and constitutes a significant breach of the first principle of the Data Protection Act. The most appropriate and proportionate regulatory action in these circumstances is to get written legal assurance from Google that this will not happen again – and to follow this up with an ICO audit.”
The ICO said: "The Commissioner has rejected calls for a monetary penalty to be imposed but is well placed to take further regulatory action if the undertaking is not fully complied with."
The Metropolitan Police last week dropped its investigation into the Street View.
The search and ad giant recently appointed a privacy director to help it sort out internal practices and oversee privacy in all its products. This came after it admitted that its mass Wi-Fi snoop from its fleet of Street View cars had slurped up passwords and entire emails and URLs. The company insists the data was collected accidentally.
The U-turn ends a less than glorious episode for the ICO which initially cleared Google's collection of Wi-Fi data by insisting it contained no personal information.
Then the ICO reopened its investigation in the wake of tougher action by other privacy bodies around the world.
Last week it was attacked by MPs, who described its behaviour as "lily-livered".
The Czech Republic recently stopped Google's Street View cars collecting more pictures until Google applies for a data processing licence.
Big Brother Watch's Alex Deane said: "The Information Commissioner’s failure to take action is disgraceful.
“Ruling that Google has broken the law, but then taking no action against it, shows the Commissioner to be a paper tiger. The Commissioner is an apologist for the worst offender in his sphere of responsibility, not a policeman of it.
"If Google can harvest the personal information of thousands of people and get off scot-free, then the ICO plainly has a contempt for privacy."®