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FTC Probes Google-Waze $1.1 Billion Deal After Consumer Watchdog Cites Antitrust Issues

3:40 pm in Uncategorized by Consumer Watchdog

FTC BuildingLess than two weeks ago after Google said it was buying Waze, developer of a mobile mapping application, for a reported $1.1 billion, the Federal Trade Commission has stepped in and said in effect, “wait just a minute here.”

Word of the FTC’s antitrust investigation was originally reported over the weekend by the New York Post and later confirmed by Google. It came less than a week after Consumer Watchdog wrote the FTC and the Department of Justice urging them to reject the deal.

Both agencies have the authority to scrutinize acquisitions for antitrust concerns and it wasn’t clear which agency was likely to handle it.

I did the prudent thing and wrote both. It looks like the FTC is listening — or at least shares many of our concerns. The antitrust problems with this deal are blatant.

“Google already dominates the online mapping business with Google Maps. The Internet giant was able to muscle its way to dominance by unfairly favoring its own service ahead of such competitors as Mapquest in its online search results,” I wrote in my letters. “Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space. Moreover, it will allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet.”

Read the letter to the FTC here.

John SimpsonIronically, Waze CEO Noam Bardin has made one of the strongest cases against the deal. He publicly described Google as his only competitor at last May’s All Things Digital conference. He said, “What search is for the Web, maps are for mobile…We feel that we’re the only reasonable competition to [Google] in this market of creating maps that are really geared for mobile, for real-time, for consumers — for the new world that we’re moving into.”

“You should take Bardin at his word,” I wrote in my letter to the FTC. “Approval of the Waze deal can only allow Google to remove any meaningful competition from the market. It will hurt consumers and hinder technological innovation. If the acquisition comes before the you, I urge you to reject it in the strongest possible terms.”

The investigation has just started, but the FTC is clearly off on the right foot.

Posted by John M. Simpson, Director of Consumer Watchdog’s Privacy Project. Follow Consumer Watchdog online on Facebook and Twitter.

Consumer Groups Reject Proposed Google Antitrust Settlement With European Commission

2:49 pm in Uncategorized by Consumer Watchdog

GoogleopolyConsumer groups on both sides of the Atlantic have objected to Google’s proposed European antitrust settlement, which relies heavily on labeling Google’s own services and on showing links to rivals in its search results, Consumer Watchdog said today.

“Consumer welfare is the ultimate test of any antitrust settlement. Google’s proposed Commitments fail to meet this standard,” wrote John M. Simpson, director of the U.S.- based public interest group’s Privacy Project in comments filed with the European Commission’s Directorate-General for Competition. “Labeling does nothing but obscure the results of Google’s anticompetitive abuses. It does not resolve the fundamental issue of search manipulation.”

Simpson continued:

Google has developed a substantial conflict of interest. It no longer has an incentive to steer users to other sites, but rather to its own services. It is becoming even more effective at this and has a greater incentive to engage in manipulation now that it is merging data collected across all its services. The only way to deal with this conflict is to remove it. There needs to be a separation of Google’s different services and assets. At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results – including links to Google products.

BEUC, The European Consumer Organization stressed the importance of search neutrality in its comments to DG-Comp:

It is important that Google is obliged to use an objective, non-discriminatory mechanism to rank and display all search results, including any links to Google products. We therefore call upon the European Commission to ensure that the non-discrimination principle is the starting point of the remedies.

Read Consumer Watchdog’s comments here (.pdf).

Read BEUC’s Comments here (.pdf).

After more than a year’s antitrust investigation by the European Commission, Google offered changes in its practices that it hopes will answer the Commission’s concern that Google is unlawfully favoring its own services in its search results. Other concerns expressed by the Commission are that Google appropriated content from other websites without permission, forced publishers to obtain most online ad services from Google and hindered advertisers’ ability to transfer campaigns across platforms.

The Commission has been “market testing” – taking comments from competitors and the public – on Google’s proposed deal for the last month. This week the Commission extended the deadline for comments until June 27 and Competition Commissioner Joaquin Almunia said it is likely Google will be asked to do more.

Consumer Watchdog said there are “fundamental flaws” in Google’s proposed Commitments and noted the proposed remedy is based on two principles. First is labeling – Google must identify its own results that it is favoring. Second is the idea of presenting links to rival services.

“Neither of these proposed solutions gets to the heart of the problem. They will not restore a competitive search marketplace that will serve the interests of consumers. Google’s conduct has severely damaged competition, leaving consumers with less choice and facing higher prices,” wrote Simpson. “The Commission must insist on remedies that as much as possible restore the market position of Google’s rivals – one possibility could be requiring the preferencing for some period of time the search result listings of rivals over Google Shopping or Google Places.”

Consumer Watchdog continued:

Ultimately the solution must be based on the non-discrimination principle. Because Google is the gateway to the Internet for so many people, it has an obligation to honor the concept of search neutrality. Google must hold all services – especially its own – to exactly the same standards, using the same web crawling, indexing, ranking, display and penalty algorithms. A demand for this even-handed treatment of all services including Google’s in the display of search results has a precedent in the regulation of Computerized Reservation Systems, which were prevented from favoring the parent air carrier on the system.

Allowing Google to continue promoting its own services and demoting those of rivals, but requiring Google to label its own services does nothing but enshrine the uncompetitive status quo. In fact the results manipulation would continue and labeling could well have the undesired outcome of making Google’s services even more prominent and attractive to consumers. Consumers would have a far less effective choice of other services because these services would be less visible. The Commission must insist on true objectivity and search neutrality in Google’s results.

BEUC’s comments written by Augusta Maciuleviciute, Senior Legal Officer and Konstantinos Rossoglou, Senior Legal Officer, warned that Google’s proposal to offer links to rival services does nothing to stop Google from squeezing out competitors:

On the contrary, Google will now be able to profit not only from the traffic it diverts from competitors, but also from the new possibilities to charge them for the inclusion among the rival links. By requiring Google rivals to pay a price for their links, Google will be granted the right to monetize its anticompetitive behavior. It will have the incentive to provide links to the rivals who pay the most and not those who provide the best or most relevant results according to consumers’ search queries.

Consumer Watchdog said another obvious failure of the proposed settlement is the limited number of Google domains to which the Commitments would apply. The proposal only covers European Economic Area domains such as www.google.at, www.google.be, www.google.cz, etc. Consumer Watchdog noted that the home page of each of these EEA Google search domains has a clear link to www.google.com. “Many Europeans click on this link and use www.google.com for their searches, yet the proposed Commitments do not apply to this important part of Google’s business,” wrote Simpson.

EU’s Google Antitrust Deal Beats FTC, But Still Doesn’t Do Enough

4:26 pm in Uncategorized by Consumer Watchdog

European Union

Details of Google’s proposed settlement with the European Union to avoid antitrust charges have been leaking out of Brussels over the weekend. And while EU competition authorities appear to have accomplished more that the gentle tap on the wrist meted out by the U.S. Federal Trade Commission, the deal as so far revealed doesn’t do enough to end Google’s anti-competitive practices.

The provisions of the EU agreement still have to be publicly released, but based on what’s emerged so far, here’s the good news: Unlike the deal with the FTC, which wasn’t even a consent agreement, the EU is demanding that the settlement would be legally binding for five years. A third party would ensure compliance and Google would face fines of 10 percent of its global annual sales if it fails to keep its promises.
The bad news is that instead of requiring Google to change its algorithm and treat all services the same, the deal will apparently allow Google to continue favoring its own services in search results so long as it labels them as its own.

Google essentially has been using its dominant position as gatekeeper of the Internet to unfairly promote its own service at the expense of competitors and consumers. In Europe it has about 90 percent of the search market. In the U.S. it’s around 70 percent. About all this agreement appears to do is require Google to be transparent about the way it unfairly abuses its market position.

Indeed, labeling could actually leave the impression with some consumers that the Google-branded result was a better one, rather than one that received a better position because Google had its thumb on the scale.

Another problem with the deal is that it doesn’t seem to do anything to rectify the damage to the market that Google has already wreaked. I’d have thought some sort of disgorgement of the Internet giant’s ill-gotten gains would have been appropriate.

John SimpsonThe next step in the EU process is for the Google deal to be “market tested.” The competition authorities will make the settlement public and receive comments on whether it solves the problems or not. I suppose it’s possible there may ultimately be stronger sanctions than currently appear to be the case in what’s been leaked or that the authorities will do more after the “market testing,” but frankly I doubt it.

Bottom line: Google has had its wings clipped a little bit. Google will be legally bound to follow labeling rules in Europe for five years and have a third-party enforcer to ensure that happens. It also means that European search results will look different than in the U.S. unless Google decides to take the same approach here or someone forces the company to do so. That could happen. Several state attorneys general led by the Texas attorney general have an open antitrust probe. I’d hope that they would settle for nothing less than what the Europeans got.

And further down the road? Fairsearch Europe has recently filed another antitrust complaint with the EU accusing Google of using Android software “as a deceptive way to build advantages for key Google apps in 70 percent of the smartphones shipped today.” Now that mobile is becoming more important than the wired Internet, Google is flexing its muscles there. The more things change, the more they stay the same…

Posted by John M. Simpson, head of Consumer Watchdog’s Privacy Project. Follow Consumer Watchdog on Facebook and Twitter.

Continuing Anti-Trust Action Against Google in Europe

2:16 pm in Uncategorized by Consumer Watchdog

European CommissionEleven Internet Companies are pressing European antitrust regulators to take strong action against Google so that the Internet giant’s smaller rivals aren’t hurt. And what happens across the pond in this case could have an impact on possible antitrust action in the United States.

The companies, organized by the British shopping comparison website Foundem, sent a letter Thursday to European competition commissioner, Joaquin Almunia saying that they “are becoming increasingly concerned that effective and future-proof remedies might not emerge through settlement discussions alone.” They want a formal complaint to be filed. That has a way of focusing settlement talks.

The EU opened its antitrust probe of Google more than two years ago. The regulators have been negotiating a possible settlement with Google and in January the company proposed steps it would be willing to take to respond the regulators’ concerns.

Supposedly Almunia and his staff are evaluating the settlement proposals. If they think they go far enough they would be made public and “market tested” before the settlement was finalized. The companies doubt Google will offer a serious remedy without a formal complaint. They wrote:

“We will respectfully withhold judgement on Google’s proposed commitments until we have seen them, but Google’s past behavior suggests that it is unlikely to volunteer effective, future-proof remedies without being formally charged with infringement. Given this, and the fact that Google has exploited every delay to further entrench, extend, and escalate its anti-competitive activities, we urge the Commission to issue the Statement of Objections.”

John Simpson The letter says that Google’s manipulation of search by promoting its own services while demoting the services of competitors hurt users by “degrading the user experience and limiting consumer choice, ” and “lay waste to entire classes of competitors in every sector where Google chooses to deploy them [search manipulation tactics].”

Our 2010 study, Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets, demonstrated how with the launch of Universal Search, Google favored its own properties and services in search results to the detriment of its competitors.

Reuters, citing sources, says that Google “had offered to label its own services in search results to differentiate them from rival services, and also to impose fewer restrictions on advertisers” as part of a settlement with the EU.

That wouldn’t be enough for the 11 companies — or me for that matter. They wrote:

“Google must be even-handed. It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.”

The EU investigation could have significant impact in the United States. You’ll recall that after an 18-month antitrust investigation, the Federal Trade Commission gave Google a mere tap on the wrist. However, several states led by the Texas attorney general have an open antitrust investigation of Google. If the Europeans demand and get meaningful changes in Google’s behavior, the state attorneys general will almost certainly demand the same here.

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Consumer Watchdog Asks FTC To Release Staff Report In Google Investigation

1:05 pm in Uncategorized by Consumer Watchdog

Says Action Necessary To Restore Faith in Agency As Effective Antitrust Enforcer

FTC

Consumer Watchdog today called on the Federal Trade Commission to release the 100-page staff report on the 19-month Google investigation as the only way to “restore a modicum of public trust in the Commission’s ability to serve as an effective antitrust enforcer.”

“I call on you to release the FTC staff report to help make clear what was behind the Commission’s otherwise unfathomable action,” wrote John M. Simpson, Consumer Watchdog’s Privacy Project director in a letter to Commission Chairman Jon Leibowitz and Commissioners Julie Brill, Edith Ramirez, Maureen Ohlhausen and Joshua Wright.

“Media reports suggest that the Commission’s tap on the Internet giant’s wrist was the result of a ‘calculated and expensive charm offensive,’ ” Simpson wrote.

Read Consumer Watchdog’s letter here.

“Put another way, by all appearances, the Internet giant played an insiders’ game and bought its way out of trouble,” Simpson wrote. “Perhaps, the Commission managed to ignore the charm offensive and decide the case on the merits. Sadly, we cannot know the true situation because we don’t have the details of the 19-month staff investigation.”

Consumer Watchdog’s letter quotes articles in Politico and The New York Times about the Internet giant’s $25 million lobbying campaign and its efforts to cozy up to the Obama Administration and other Washington insiders. “It was a multiyear campaign focused on this very moment, knowing as the company grew these issues were going to come up,” Alan Davidson, Google’s former top lobbyist, told Politico.

Read the Politico article here.

Read The New York Times article here.

The best course of action, Consumer Watchdog said, would have been to file an antitrust suit and bring the case to trial. All the evidence would have been part of the public record. In a November letter to the FTC Consumer Watchdog warned that a negotiated settlement would inevitably invite cynicism about the results.

Consumer Watchdog’s letter to the Commission today continued:

Opting to avoid a trial and filing a formal consent agreement would at least have required a complaint, spelling out the violation. Instead you have settled for promises from a company that has a demonstrated record of repeatedly breaking its word. And it’s not even clear what they did wrong.

Your only chance of re-establishing the FTC’s credibility on its handling of the Google investigation is to release the 100-page staff report about the inquiry. Releasing the report would put the Commission’s decision in context.

Moreover, the public has the right to know what the staff recommended and to understand the reasoning of the professionals who conducted the lengthy investigation and the quality of their work. It could be possible that the staff botched the investigation and you were left with no other choice. If the report contains Google trade secrets, they could be redacted.

FTC’s Settlement With Google Fails To End Key Abuse

3:22 pm in Uncategorized by Consumer Watchdog

FTC-Google

Department of Justice, State Attorneys General Must Press To End Search Bias

The Federal Trade Commission’s settlement with Google fails to end its most anticompetitive practice, Consumer Watchdog said today and the public interest group called on the Department of Justice and state attorneys general to press forward to end the Internet giant’s monopolistic behavior in search results.

“Google clearly skews search results to favor its own products and services while portraying the results as unbiased. That undermines competition and hurts consumers,” said John M. Simpson, director of the group’s Privacy Project. “The FTC rolled over for Google. They’ve accepted Google executives’ promises that they will change two practices without even requiring a consent agreement, but Google has a track record of broken promises. Don’t forget, this fall the FTC fined Google $22.5 million for violating its most recent consent agreement. Why would the FTC take Google at its word?”

The new Assistant Attorney General for the Department of Justice Antitrust Division, William J. Baer, should make Google’s abuse of search a top priority, Consumer Watchdog said.

The FTC’s settlement does require a consent agreement regarding so-called Standards Essential Patents held by Google’s Motorola subsidiary. Google is now required to license these patents to any company on “fair, reasonable and non-discriminatory” terms – known as FRAND terms.

“This will help ensure competition in the manufacture of smartphones and tablets,” said Simpson, “but that was never the heart of the issue. Biased search and Google’s favoring its own properties do real consumer harm. Google is the gateway to the Internet for most people. When Google rigs the game, we all suffer. They need to be stopped.”

Consumer Watchdog expressed concern that FTC Chairman Jon Leibowitz, who is expected to step down from the commission soon, may have rushed to finish the investigation so it could be concluded under his chairmanship.

The nonpartisan, nonprofit public interest group noted that Google’s monopolistic business practices are under investigation by a number of state attorneys general including Texas, California, New York and Ohio. European Union competition officials are also investigating Google.

Did The FTC Find Its Spine In Google Probe? We Need To Keep The Pressure On

1:45 am in Uncategorized by Consumer Watchdog

FTC

Last weekend news broke that the Federal Trade Commission was about to settle its two-year antitrust investigation of Google with what charitably could be termed a slight tap on the wrist. But by Tuesday night the reported holiday gift to the Internet giant was unraveling and the FTC signaled it would keep the investigation going into January.

So what’s behind the Commission’s new found spine? Is it real? Will it last?

First, let’s review what reportedly was on the table. The FTC wasn’t going to do anything meaningful about the way Google favors its own services in search. It was going to accept a non-binding note from the Internet giant essentially promising to play nice with others. Google would stop scrapping content from other sites and would make it easier to move ad campaigns from Google to other sites. There would be no binding consent agreement on the key issues. Supposedly Google would sign a consent agreement on the unrelated question of how it unfairly uses its “Standards Essential Patents” to thwart competitors.

But on the key anticompetitive issues that harm competitors and consumers Google once again would be saying, “Trust us, we’ll be nice.” Given its record of broken promises and violated consent agreements, why would anyone believe Google?

So when word of the expected settlement leaked, there was substantial pushback. Craig Timberg of The Washington Post explained it like this:

“Recent news reports detailing the terms of the tentative agreement unleashed a torrent of opposition from companies that had complained, state attorneys general who felt cut out of negotiations, interested lawmakers and consumer advocates. Many have long said that Google was manipulating search results to hobble competitors and gain advantage for its own offerings in shopping, travel services and other lucrative businesses — and in the process, limiting consumer choice.”

Consumer Watchdog has been pushing the FTC for meaningful action since the antitrust probe began. Last month we wrote a letter to the Commissioners urging them to file an antitrust suit and seek the breakup of the company and a spinoff of the Motorola Mobility subsidiary. With the reports that the FTC appeared to be caving, on Tuesday we wrote to Attorney General Eric Holder asking the Department of Justice to take over the ongoing federal antitrust probe of Google after the company’s chairman in a news interview equated it with antitrust poster child Microsoft in the 1990s.

The same day The Emperor of All Identities, an op-ed written by former FTC Commissioner Pamela Harbour Jones, appeared in The New York Times. She wrote:

But we need to look at Google’s market role — and behavior — through a different prism. Google is not just a “search engine company,” or an “online services company,” or a publisher, or an advertising platform. At its core, it’s a data collection company.
Its “market” is data by, from and about consumers — you, that is. And in that realm, its role is so dominant as to be overwhelming, and scary. Data is the engine of online markets and has become, indeed, a new asset class…
Now, the FTC. has another chance to protect consumers, promote innovation and ensure fair competition online. In making its decision, it must understand that while Google may be the runaway leader in Web search and online advertising, its most troubling dominance is in the marketplace of private consumer data. If real competition in this area can be restored, I am confident that market forces will provide the incentives necessary for companies to offer attractive services and relevant, engaging ads without violating consumer privacy.

Perhaps the FTC commissioners felt trapped in a pincer between state antitrust investigations and the probe underway by the European Commission. Texas, California, Ohio and New York have active investigations of the Internet giant. In fact Texas has sued Google to get documents it needs for the investigation. Google is stiffing the Texas AG. As Ed Wyatt and Clair Cain Miller reported in The New York Times, “State attorneys general, some of whom are undertaking their own Google investigation, were briefed on the potential agreement, and some were unhappy that they were not included in the talks and that the proposed punishment seemed light.”

Meanwhile, Politico’s Steve Friess and Elizabeth Wasserman noted that “European regulators appear headed toward a dramatically different conclusion to their antitrust probe of Google than their American counterparts — a binding agreement that could cost the search company dearly if violated. That’s one of several reasons why the expected Federal Trade Commission settlement that sources said was a done deal unraveled Tuesday.”

“At the FTC, people close to the agency said, commissioners grew irked that they were being portrayed as spineless, wrote Wyatt and Miller in The New York Times. “In a parallel investigation, European regulators were said to be wringing a more stringent agreement from Google.”

Well, maybe the commissioners are irked at being called spineless, but guess what? They were. I hope they are beginning to see the need — at a very minimum — for a binding consent decree that halts Google’s abuses. However, the best course would be to follow the FTC staff’s recommendation and file an antitrust suit. The fully developed public record that would result from a trial would ensure that effective remedies could be put in place. A negotiated settlement will inevitably invite cynicism about the results, and keep any documents obtained in the course of the investigation out of the public eye.

Meanwhile, the states attorneys general must keep their investigations open and aggressive in case the FTC falters again. We need to keep the pressure on; it would be a sad situation if we have to rely on the European Commission to solve our antitrust problems for us.
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Posted by John M. Simpson. John is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

FTC should proceed with case against Google

2:44 pm in Uncategorized by Consumer Watchdog

 When you stare down a $220 billion corporation, it’s hard not to blink. But if the Federal Trade Commission doesn’t deliver on its ultimatum to Google that it settle its antitrust problems soon for real relief or face prosecution, then consumers will never get the open and unfettered online and mobile access to information they deserve.

While the government’s battle with Microsoft in the 1990s was about whether the dominant software company could bundle software and an Internet browser, the antitrust case against Google is about whether one company should have so much control over online information that it can steer us any where it chooses for its own profit.

This is the power to make or break businesses, control online discourse, and steer consumers to the Internet giant’s own websites and affiliated businesses, all based on tweaking an unseen algorithm and holding a network of key online and mobile gateways and properties.

Google’s 70% control of online searches and 90% control of mobile searches, along with its dominant Android mobile operating system, patents, and vast content acquisitions make it the Standard Oil of our time.

The allegations against Google are that it restrains online trade with biased search results that drive consumers to the content it owns (Google Travel, Products, YouTube, Maps, Google+, etc.) or content it chooses, as opposed to that favored organically by the public.

Restraint of trade may be different today than in 1911 when the U.S. Supreme Court ordered John Rockefeller’s Standard Oil broken into parts under the Sherman Antitrust Act. Nonetheless the antitrust principle of preventing dominant players from playing unfairly and hurting consumers by driving out legitimate competition is very real for Google’s 2012 business model.

The principle at stake in the FTC case is critical:

If you want to do business online, should you be forced to do business with Google?

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Keep The Internet Free

1:07 pm in Uncategorized by Consumer Watchdog

Photobucket

Should one company be able to control how you use the Internet and what you see?

Google — with 70% of online search and 90% of mobile search markets — is increasingly doing this. Evidence before the Federal Trade Commission (FTC) shows that Google skews its results towards its own services and commercial priorities, when consumers believe they are getting the most “popular” organic result.

After a year’s probe the FTC’s staff has recommended antitrust prosecution, but politics may be stopping the suit. Please send an email today asking the Commission to approve that antitrust suit.

Consumer Watchdog cheered when the FTC took up its antitrust investigation, which we began calling for more than two years ago. Recently there have been reports that the Commissioners are wavering and may not act against the Internet giant. You can help us make sure the five commissioners don’t cave.

Google uses its monopoly on the Internet and in the mobile space to bias searches in favor of its own products and services, harming consumers and competitors alike. The time for action is now. Ask the Commission to adopt its staff’s recommendation and approve an an antitrust suit against Google.

For more information on our support for the FTC’s antitrust investigation read our letter to the Commission here.
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Posted by John M. Simpson. John is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

Google Ruling Shows Need For Do Not Track And Strong Antitrust Action

12:48 pm in Uncategorized by Consumer Watchdog

Gavel

A federal judge’s ruling late Friday in a key privacy case demonstrates the need to implement tough “Do Not Track” rules and byto take decisive action on the antitrust front against Google.

Judge Susan Illston approved the Federal Trade Commission’s $22.5 million settlement with the Internet giant for hacking past privacy settings on Apple’s Safari browser in U.S. District Court in San Francisco, in a deal that Consumer Watchdog had argued was insufficient in light of Google’s wanton privacy violations.

“The Court also grants additional deference where the decree has been negotiated by a governmental agency that is an expert in its field,” Judge Illston said in her decision.

I was disappointed with the ruling, but think we made important points that will affect how similar cases are dealt with in the future. Drawing the public’s attention to this case was tremendously important. I’m glad we did it.

Attorney Gary Reback of Carr & Ferrell represented us as an amicus curiae or friend of the court. Frankly, I expected an uphill battle with Google and the FTC aligned against us. Together the government and Google defended the deal that had been negotiated in secret.

Judge Illston did not surprise when she began the hearing by saying her “preliminary view” was to approve the settlement. We opposed the deal for three basic reasons:

1. The settlement allows Google to deny that it did anything wrong.

2. The $22.5 million fine — a lot for you and me — is insufficient for a company like Google with revenue of $40 billion a year. Really it’s just chump change. Google makes $22.5 million in about five hours. Google was liable for fines totaling $16,0000 per day per violation. If you consider each wrongly placed cookie a violation — and you should — Google quickly reaches a liability in the billions. A fine of that magnitude would have caught Google executives’ attention.

3. The injunctive relief in the settlement is insufficient. Google is allowed to keep the ill-gotten data it obtained by hacking around the Safari privacy settings, which is the browser used on iPhones and iPads.

Reback made the arguments in two excellent briefs before the hearing. Both are well worth reviewing. The first is particularly valuable for the way it lays out Google’s history of privacy invasions. Read the original amicus brief here and our response brief here.

As the hearing began Judge Illston said there was no need to require Google to admit it did anything wrong. She said she had no problem with the amount of the fine. She did, however, have questions questions about allowing the Internet giant to retain the wrongfully acquired data.

The government and Google’s attorneys tried to make the case that the Google wouldn’t use the information, so keeping it was irrelevant. I thought Reback effectively rebutted their position, but then, you’d expect me to think that.

By the end of the day, though, Judge Illston had ruled against us. As Reback told The Associated Press’ Mike Liedtke, after the hearing, a consent decree ‘‘is not a good way to police Google,”

What the decision does is allow Google executives to buy their way out of trouble with what for them is pocket change and then deny doing anything wrong. As our briefs made clear, Google has demonstrated an ability to out maneuver government regulators repeatedly and ride roughshod over the privacy rights of consumers. Google continues to be disingenuous about its practices.

That’s why the decision makes two things clear: First, if consumers are to have any privacy at all and be able to control what data is gathered about them, tough Do Not Track rules must be implemented. Second, as we told the FTC last week, the Commission needs to file an antitrust suit against Google and take it to trial in U.S. District Court. The FTC should seek to force Google to divest its Motorola Mobility subsidiary, separate search from advertising, and undergo the same sort of regulation as a public utility.

The Federal Trade Commission’s role in keeping Google’s abuses in check is essential. The Internet is too important to allow an unregulated monopolist to dominate it.

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