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Consumer Watchdog Highlights Google Hypocrisy In Differing ‘Cloud Computing’ Statements

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Wed, Oct 14, 2009 at 10:51 am

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Group Also Releases 3rd Round Of Annotated Google Documents In ‘Charmwatch’ Campaign

SANTA MONICA, CA — Consumer Watchdog today slammed Google for its apparent hypocrisy in marketing its new “cloud computing” products, blandly assuring customers that their data is secure on Google Internet servers but at the same time warning shareholders of the security risks posed by swift expansion of its commercial online business. The nonpartisan, nonprofit group sent a letter to a Los Angeles City Councilman showing that Google says one thing when trying to sell its products, but something else in federally required filings aimed at shareholders. Consumer Watchdog also released another round of annotated Google P.R. documents in its Google “Charmwatch” campaign.

View Round Three of Consumer Watchdog’s Google “Charmwatch” documents annotated by an industry insider here.

Download the documents as a PDF file here.

Google’s marketing practices were outlined in a letter to Bernard C. Parks, Chairman of Los Angeles City Council’s Budget and Finance Committee, which is weighing a $7.25 million contract that would move the city’s 30,000 email users to a “cloud computing” system provided by Google. The deal could be considered by the committee next week.

“The difference in tone between Google’s attempts to reassure potential users of its applications about security concerns and its explicit warnings of the applications’ risks in communications aimed at shareholders as required by federal law smacks of hypocrisy,” wrote John M. Simpson, consumer advocate, in the letter.

Download a PDF of the Consumer Watchdog letter to Los Angeles Councilman Bernard C. Parks here.

Read Google’s Form 10-Q here.

As an example the letter cited a company document titled “Introduction to Google.” The document claims, “Google goes to great lengths to protect the data and intellectual property on servers that host user data.  These facilities are protected around the clock and we have a dedicated security operations team who focuses specifically on maintaining the security of our environment.”

But in the the most recent form 10-Q filed with the Securities and Exchange Commission Google warns:

“We may also need to expend significant resources to protect against security breaches. The risk that these types of events could seriously harm our business is likely to increase as we expand the number of web based products and services we offer as well as increase the number of countries where we operate…

“These products and services are subject to attack by viruses, worms, and other malicious software programs, which could jeopardize the security of information stored in a user’s computer or in our computer systems and networks…

“Our systems are vulnerable to damage or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, computer denial of service attacks, or other attempts to harm our systems. Some of our data centers are located in areas with a high risk of major earthquakes. Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism, and to potential disruptions if the operators of these facilities have financial difficulties. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, a decision to close a facility we are using without adequate notice for financial reasons, or other unanticipated problems at our data centers could result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities.”

Download a PDF of the Consumer Watchdog letter to Los Angeles Councilman Bernard C. Parks here.

Read Google’s Form 10-Q here.

“If Google’s system is adopted, the city must insist on adequate security guarantees,” the letter to Parks concluded. “First, all data sent to Google’s servers over the Internet should use SSL encryption through the https protocol.  Data stored on Google servers must be encrypted and only the city should have the encryption key. Finally, to ensure that Google takes adequate security precautions, you should insist upon substantial financial penalties if security or privacy is breached.”

Google ‘Charmwatch

Consumer Watchdog also released another round of red-marked annotated Google documents.  This is the third round of  Google documents with commentary added by an industry insider that Consumer Watchdog has released as part of Google “Charmwatch.” The purpose of Consumer Watchdog’s Google “Charmwatch” is to prevent the Internet giant’s self-serving claims from remaining unanswered in the court of public opinion. The red-lined commentary was added to the Internet Giant’s brochure, “Introduction to Google.”

Here are some of the industry insider’s most recent “Charmwatch” comments:

– Google describes itself as “company built on search.”  The commentary points out that the company is built on “monetizing your personal information.”

– Google says it creates “economic opportunity for businesses large and small.”  The commentary says the company’s products create economic opportunity for Google “by allowing us to monetize your content (movies, music, books, TV shows, news, etc.) whether you like it or not… We like to call it ‘innovation without permission.’”

–The industry insider’s comments call on Google to be open and transparent about “astroturf” efforts it has funded.  As examples, the comments note that Goggle CEO Eric Schmidt contributed $1 million to the New America Foundation and then NAF’s Tim Wu wrote a commentary piece, “Save the Google Book Search Deal.”

In addition, Viacom sued Google-owned YouTube for copyright infringement; Google then gave $2 million to Larry Lessig’s Stanford Center and Lessig sued Viacom. Google also  donates free “adwords” to more than 5700 non-profits. The list of recipients has not been disclosed and they are forbidden to disclose the terms of their grants. Google contributed to Harvard’s Berkman Center, which then sponsored a  lobbying effort to “explain” privacy to the Federal Trade Commission.

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA.  Our website is: www.ConsumerWatchdog.org.

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This post was written by:

John M. Simpson

- who has written 361 posts on Inside Google.

John M. Simpson 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.

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