I certainly hope the penalty for illegally wiretapping hundreds of millions of people is more than $1 per head. I value the privacy of my conversations (and life) way more than that.
Besides, if I opt-in to this service, why should everyone who ever walks into my home or office be presumed to have made the same choice? What if I am a doctor or lawyer who is not legally allowed to make that choice?
Consider that you're one of the developers that wrote this feature. You try very hard to make sure your users privacy rights are respected. Normally your work is strong and you catch all of the corner cases, but this one you missed. You've fixed it upstream, but folks are demanding 5% of the company's bottom line because of a mistake /you/ made. The code isn't even used unless the user ticks a box to turn it on in the first place, which is even verifiable with a cursory use of system monitoring tools like fuser, lsof, etc.
You've been marked as costing a company a major stake of their income. You'll likely never live that down.
If you don't like the company's behavior, /don't use the software/. Simple, clean, and effective in large numbers -- more so than regulation action. Chromium is an open source first browser, we as a community actually have a hand in its development. If you don't like this, fix it.
By that reasoning, tobacco and asbestos shouldn't be regulated
IMNSHO, user-hostile business decisions should be fined in a way that does impact the business. We've long since passed the point where this can be resolved with a slap on the wrist. So yes, 5% of revenue seems like an appropriate figure to start with.
Surely a developer working for Google knows that user privacy is not a priority for the company?
Google does not operate like Apple -- there are many hands at the tiller, and the ship moves in almost arbitrary directions at times. Situations like this do come up, and they are most of the time honest mistakes or oversights.
Google cares very much about other actors violating user privacy. Not quite the same amount of "caring" if the violations are being done by Google itself.