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Inside Google » Blog Posts http://insidegoogle.com A Consumer Watchdog Investigation Thu, 28 Aug 2014 02:57:15 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.3 Google Must Allow U.S. Users To Be Forgotten http://insidegoogle.com/2014/06/google-must-allow-u-s-users-to-be-forgotten/ http://insidegoogle.com/2014/06/google-must-allow-u-s-users-to-be-forgotten/#comments Thu, 26 Jun 2014 17:52:56 +0000 http://insidegoogle.com/?p=10315 Google today began removing some search results in Europe under the recently court-upheld “right to be forgotten.”  The Internet giant should offer U.S. users the same basic right to privacy.

In May the European Court of Justice ruled that a person has the right to request the removal of search engine links to information that is inadequate, irrelevant, no longer relevant, or excessive. The removal isn’t automatic if requested.  There needs to be a balance between the individual’s privacy and public’s right to know in making a decision to remove a link.

The information itself is not taken down from the Internet; only the link from a person’s name in a search result is removed if Google agrees with the request.  If Google disagrees, a person can appeal to his country’s data protection authority.

In what I consider an outrageous disregard for the privacy rights of its U.S. users, Google is only letting people be forgotten on its European sites like Google.ie, Google.co.uk, Google.fr and Google.de.

At the bottom of a European search results page for a person’s name Google offers this statement: ‘Some results may have been removed under data protection law in Europe.”  The Internet giant also offers a link explaining the policy.

Despite what some people have claimed, the right to be forgotten isn’t about censorship.  It brings the real benefit of privacy by obscurity into the Digital Age.

Here’s what I mean:  Before the Internet if I did something foolish when I was young and foolish — and I probably did –  there might well be a public record of what happened. Over time, as I aged, people tended to forget whatever embarrassing things I did in my youth.  I would be judged mostly based on my current circumstances, not on information no longer relevant.  If someone were highly motivated, they could go back into paper files and folders and dig up my past.  Usually this required effort and motivation.  As a reporter,  for instance, this sort of deep digging was routine for me with, say, candidates for public office.  This reality  that our youthful indiscretions and embarrassments slipped from the general public’s consciousness  is privacy by obscurity.

The Digital Age has ended that. Everything — all my digital footprints — is instantly available with a few clicks on a computer or taps on a mobile device.

Now, the right to be forgotten will restores the balance in Europe that is provided with privacy by obscurity.  The right simply allows a European to identify links that are no longer relevant and ask for their removal.  It won’t always happen and when it doesn’t there will be an appeal process.

Americans deserve the same right. Google, which claims to care about privacy,  should be ashamed that it is not treating people on both sides of the Atlantic the same way.

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Google’s Latest Deal Takes Spying Ability To New Heights http://insidegoogle.com/2014/06/googles-latest-deal-takes-spying-ability-to-new-heights/ http://insidegoogle.com/2014/06/googles-latest-deal-takes-spying-ability-to-new-heights/#comments Mon, 16 Jun 2014 22:57:39 +0000 http://insidegoogle.com/?p=10286

 Google’s latest planned acquisition will will take the Internet giant’s ability to spy on us and gather informationabout our activities to new heights — literally.

Last week Google said it would buy Skybox Imaging for $500 million, chump change for a company that is sitting on around $61 billion in cash. Skybox is building low cost satellites to orbit 185 miles above the earth’s surface that will provide high resolution satellite images.

Until last week satellite imagery where features less than two feet were visible was banned for commercial use in the United States.  The Commerce Department changed that rule, now allowing images with resolution as small as one foot. That’s small enough to show manhole covers and mailboxes. Google’s Skybox satellites will be even more revealing and intrusive than the images now availeable.

Here’s what Christopher Mims of The Wall Street Journal wrote about the deal:

And here’s what Skybox could allow Google to accomplish: Within a couple of years, when you want to know whether you left your porch light on or if your teenager borrowed the car you forbade her to drive, you might check Google Maps.

That’s because by 2016 or so, Skybox will be able to take full images of the Earth twice a day, at a resolution that until last week was illegal to sell commercially—all with just a half-dozen satellites. By the time its entire fleet of 24 satellites has launched in 2018, Skybox will be imaging the entire Earth at a resolution sufficient to capture, for example, real-time video of cars driving down the highway. And it will be doing it three times a day.

In announcing the acquisition June 10  Goggle was low-key about the benefits: “Skybox’s satellites will help keep Google Maps accurate with up-to-date imagery. Over time, we also hope that Skybox’s team and technology will be able to help improve Internet access and disaster relief — areas Google has long been interested in.”

The fact of the matter is that Skybox doesn’t even consider itself an imaging company.  They are all about the knowledge that can be gleaned from their images and data. Knowledge that is developed by snooping and spying, I’d say.

“We think we are going to fundamentally change humanity’s understanding of the economic landscape on a daily basis,” co-founder Dan Berkenstock told The Wall Street Journal.

Here is the sort of thing he’s driving at:  Back in 2010 an USB stock analyst figured out that by buying even the relatively low resolution satellite photos that were available of  Wal-Mart store parking lots, he could predict sales figures before the data was released.  Full lots mean lots of shoppers. Lots of shoppers mean more sales.

And there is industrial espionage that will directly benefit Google.  Suppose the Internet giant could could figure out when Apple was planning to release the next iPhone.  It could plan competitive strategy for its Android devices. With Skybox Google can see what’s going on.  The Taiwanese company Foxconn manufactures the iPhone. Measuring the density of trucks around the Foxconn plant reveals when a substantial number of devices are being brought to market.

“We’re looking at Foxconn every week,” Mr. Berkenstock told The Journal’s Mims.  Mims offered this assessment of Skybox’s future impact:

 “It’s the unpredictable applications that could be the biggest. Like GPS before it, which started out as a military-only system that required laptop-size receivers and now enables driving directions in every smartphone, Skybox’s images will inevitably lead to apps and services no one can envision—with unknowable disruptive potential.”

And he offers this note of caution:

A potential downside to the Skybox acquisition is that it could represent a new level of privacy invasion for everyday people. Google will be able to determine all sorts of things about us that might not have been discernible before. For example, is your home on a block with lots of trees? It turns out that correlates with household income. Or, how many cars do you own?

Google’s satellites won’t be powerful enough to pick out individual people. Yet since Skybox’s satellites get their visual acuity not from their optics—which are relatively primitive—but clever software, it’s possible they’ll become ever more keen-eyed even after they launch.

In a few years, when we look up at the sky, we’ll have to wonder: Am I being watched right now?

Consider the power Google will have when it combines what it knows from the satellite images with what he knows about our online activities and emails. In George Orwell’s 1984 government surveillance was ubiquitous.  “Big Brother is watching” citizens were reminded.  Orwell was right about surveillance.  What he didn’t predict was the extent it would be done by commercial entities.

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Glassholes Meet Up At West Hollywood Bar http://insidegoogle.com/2014/05/glassholes-meet-up-at-west-hollywood-bar/ http://insidegoogle.com/2014/05/glassholes-meet-up-at-west-hollywood-bar/#comments Mon, 05 May 2014 21:33:41 +0000 http://insidegoogle.com/?p=10201

Google’s privacy invading wearable computing device, Glass, has been taking a lot of well deserved hits lately, and the Internet giant seems to have launched a PR campaign to bolster the device’s plummeting image. Over the weekend Google sponsored “Glass Night Out” at various locations across the country.

Saturday night my colleague Evan King, decided to don Consumer Watchdog’s Glass and check out the local event, which was held at Vintage Enoteca in West Hollywood. The Internet giant described the campaign on its Glass Google+ page:

This Saturday night, you and Glass are going out! Explorers across the US are getting together to mingle, snack, and cheers for the first Glass Night Out.

In the words of +JR Curley, these events are part of a community initiative to have a formal Explorer meet up, team with local businesses, and help dispel Glass myths to all.

Check out the details here: https://plus.google.com/u/1/communities/101934840536524242061

The event was billed as the “first of many #glasswelcomed and #glassnightout events.”

King tells me his impression of the event was that it was intended to dispel the notion that “Glass Explorers” — the folks who for the most part wrangled invitations and shelled out $1,500 to try Glass — are an out-of-touch, tech elite who frequently behave like, well, Glassholes.

King reports than we he got to the bar around 9 pm sporting Consumer Watchdog’s Glass (and no, I’m not going to say where we got the device), there were 10-15 “Explorers” more or less off by themselves in the back of the bar.

His analysis of what he saw was that while he observed no particularly outlandish Glasshole behavior, the group seemed to be an out-of-touch, tech elite.

I’m willing to concede that Glass might be useful in a few very special circumstances, but those uses are largely trumped by the device’s threat to privacy.  We’ve made two short videos showing, for example, how Glass can be used to surreptitiously record someone’s ATM pin number or how Glass invades privacy in a restroom.  Take a look at Consumer Watchdog’s study reviewing some of the device’s major shortcomings and pitfalls.

Washington Post tech reporter Hayley Tsukayama wore Glass for a week and wrote about the experience in an article, My Awkward Week with Google Glass. As she succinctly put it, “I’m wearing Google Glass. And I hate it.”

“Would I buy Google Glass?” Tsukayama asks rehtorically. “Not now, especially with that $1,500 price tag. The device has a lot of evolving to do before it’s ready for the world. The world has some evolving to do before it’s ready for Glass, too.”

I’m betting it will take a long, long time.  For now, simply just say no and don’t be a Glasshole.

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Tech Titans’ Dirty Linen Won’t Be Aired Further http://insidegoogle.com/2014/04/tech-titans-dirty-linen-wont-be-aired-further/ http://insidegoogle.com/2014/04/tech-titans-dirty-linen-wont-be-aired-further/#comments Thu, 24 Apr 2014 23:39:24 +0000 http://insidegoogle.com/?p=10075 A settlement has been reached in the $3 billion class action lawsuit on behalf of 64,000 high tech workers who charged that Silicon Valley tech titans like Steve Jobs, Eric Schmidt and Sergey Brin illegally conspired to keep their wages down.

Details of the settlement weren’t released, but a joint letter from plaintiffs’ and defendants’ lawyers to federal Judge Lucy Koh was filed Thursday.  The companies agreeing to the settlement include Google, Apple, Intel and Adobe.  Earlier Lucasfilm, Pixar and Intuit, who had also been charged with conspiring to screw their workers had already agreed to pay a combined total of $20 million.

I’m not surprised the companies settled. Once Judge Koh granted class action status, it greatly increased the plaintiffs’ leverage.  Their experts estimated that the conspiracy deprived workers of a total of about $3 billion in wages they would otherwise have earned.  If that estimate had held up through the trial, damages could have been tripled to $9 billion under antitrust law.

Documents  made public in various court filings as the suit moved towards a scheduled May 27 trial made it quite clear salaries in the tech industry were lower than they should be because the highly paid robber baron executives conspired to keep them that way.   Pando Daily, which examined, emails and documents in the case offered these examples of how the tech titans schemed:

In 2007, when Jobs learned that Google tried recruiting one of Apple’s employees, he forwarded the message to Eric Schmidt with a personal comment attached: “I would be very pleased if your recruiting department would stop doing this.”
Within an hour, Google made a “public example” by “terminating” the recruiter in such a manner as to “(hopefully) prevent future occurrences.”
Likewise, when Intel CEO Paul Otellini heard that Google was recruiting their tech staff, he sent a message to Eric Schmidt: “Eric, can you pls help here???”
The next day, Schmidt wrote back to Otellini: “If we find that a recruiter called into Intel, we will terminate the recruiter.”

 

And it’s not like Schmidt didn’t know that what he was doing was wrong. According to Pando Daily, “Later that year, Schmidt instructed his Sr VP for Business Operation Shona Brown to keep the pact a secret and only share information ‘verbally, since I don’t want to create a paper trail over which we can be sued later’”

According to The New York Times, Apple CEO Steve Jobs wrote Google Co-founder Sergey Brin, “If you hire a single one of these people, that means war.”  When he received an email from Schmidt saying Google was firing a recruiter for soliciting Apple employees, Jobs forwarded Schmidt’s note to a top Apple human resources executive with a smiley face, according to Reuters.

With smoking guns like these already on the record, it’s crystal clear the tech robber barons didn’t want more embarrassing information to come out at trial. They don’t want to air any more dirty linen in a case that they were certain to lose.

Interestingly, not every tech titan played along.  Sheryl Sandberg had been at Google and knew of the conspiracy.  She left the Internet giant and now is Facebook’s chief operating officer.  Approached at Facebook to join the conspiracy and agree not to hire Google employees, she refused.

While it’s true that a settlement means the tech robber barons’ dirty linen won’t be further aired in public, there is another more troubling aspect of the case.  The suit is against corporations.  It’s not against the tech titans that actively conspired to screw their workers and seem to have known they were breaking the law.  They’re not being held accountable for anything.  Indeed,  even as details of the conspiracy were becoming clear in court filings, Google Chairman Eric Schmidt was receiving a $106 million bonus.

Google’s board of directors should be ashamed. Instead, Schmidt and his co-conspirators should be looking at time in the slammer.  We need to hold executives liable for breaking the law.

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Google Ending Privacy Breach Consumer Watchdog Targeted In FTC Complaint http://insidegoogle.com/2013/04/google-ending-privacy-breach-consumer-watchdog-targeted-in-ftc-complaint/ http://insidegoogle.com/2013/04/google-ending-privacy-breach-consumer-watchdog-targeted-in-ftc-complaint/#comments Tue, 23 Apr 2013 23:10:29 +0000 http://insidegoogle.com/?p=9795 Google apparently is ending an egregious privacy breach involving people who buy apps from its Google Play store using Google Wallet to pay. Consumer Watchdog filed a complaint to the Federal Trade Commission with a copy to California Attorney General Kamala Harris about what Google was doing. The complaint  alleged that the Internet giant was violating its privacy policies and its “Buzz” consent agreement with the FTC.

Rep. Hank Johnson, D-GA, also questioned Google about what it was doing.  Google was sending to apps developers the name, email address and address of people who bought apps on Google play.  It tried to claim that the the information was necessary for the transaction, but that’s clearly not the case when talking about downloading an app from its app store. Neither Apple nor Microsoft provide such personal information. Google’s response to Rep. Johnson confirmed what Google was doing and actually showed it was unnecessary.  Consumer Watchdog sent a second letter to the FTC with a copy to California Attorney General Kamala Harris when Google answered Rep. Johnson’s letter.

On Tuesday WebProNews and DroidLife reported Google was addressing the concerns on a new Wallet Merchant Center it is rolling out and won’t send the personal information to apps developers.

I’m glad the change is coming, but I’ve got questions.

What role did the Federal Trade Commission or the California Attorney General’s office play in this change?  Why did Google only act when formal complaints were filed? Will there be fines?

Google has become a serial privacy violator.  You’ll remember that no sooner was the ink dry on the “Buzz” consent agreement than it was caught hacking around the privacy settings on the Safari browser used on iPhones, iPads and other Apple devices.  It ultimately cost Google a fine of $22.5 million, which is pocket change to a company that has annual revenue of around $50 billion. It’s like giving a $25 parking ticket to a person who makes $50,000 a year.

Google is simply figuring that fines are a cost — and a minor one at that — of doing business.  In case you missed it, on Monday Germany hit Google with a $189,225 for the Wi-Spy incident where its Street View Cars sucked up emails, URLs, passwords, account numbers as they snapped photos around the world.

In describing the fine The New Times’ Claire Cain Miller wrote:

Regulators in Germany, one of the most privacy-sensitive countries in the world, unleashed their wrath on Google on Monday for scooping up sensitive personal information in the Street View mapping project, and imposed the largest fine ever assessed by European regulators over a privacy violation.
The penalty? $189,225.
Put another way, that’s how much Google made every two minutes last year, or roughly 0.002 percent of its $10.7 billion in net profit.
It is the latest example of regulators’ meager arsenal of fines and punishments for corporations in the wrong. Academics, activists and even regulators themselves say fines that are pocket change for companies do little to deter them from misbehaving again, and are merely baked into the cost of doing business.

The fact Google is changing Google Wallet’s practices makes it clear Google violated the Buzz Agreement.   Google claims that it is taking privacy seriously now that it is operating for 20 years under the Buzz Agreement. It isn’t and the regulators aren’t holding Google’s feet to the fire.

The company’s executives need to be held to account in a meaningful way. I’ve always argued the way to get corporate executives’ attention is to hit them with jail time when they flout the law.  It’s not going to happen here, but a meaningful fine for the second Buzz violation sure would be nice.

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EU’s Google Antitrust Deal Beats FTC, But Still Doesn’t Do Enough http://insidegoogle.com/2013/04/eus-google-antitrust-deal-beats-ftc-but-still-doesnt-do-enough/ http://insidegoogle.com/2013/04/eus-google-antitrust-deal-beats-ftc-but-still-doesnt-do-enough/#comments Mon, 15 Apr 2013 23:43:27 +0000 http://insidegoogle.com/?p=9785 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.

The 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…

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Google’s Privacy Chief Is Stepping Down http://insidegoogle.com/2013/04/googles-privacy-chief-is-stepping-down/ http://insidegoogle.com/2013/04/googles-privacy-chief-is-stepping-down/#comments Tue, 02 Apr 2013 22:51:48 +0000 http://insidegoogle.com/?p=9775 Google’s privacy chief, Alma Whitten, is stepping down the Internet giant confirmed Monday.  Since word of her departure came out on April Fools’ Day many folks probably thought this was part of the company’s annual elaborate pranks like its “announcement” of a new service called “Google Nose.”

I mean how many of you actually thought Google even had a privacy chief?

Whitten, an engineer based in London (now that’s a location convenient to its Mountain View Headquarters) took the position in 2010 about six months after the Wi-Spy scandal was uncovered and as Google was reaching a consent agreement with the Federal Trade Commission for invading users’ privacy when it launched the ill-fated Buzz social network.

Well, about all that happened on Whitten’s watch was that Google became a confirmed serial privacy violator.  No sooner was the ink dry on the Buzz Consent Decree with the FTC, than Google was caught hacking around privacy settings on Apple’s Safari browser, which is on iPads and iPhones, and lying about its practices on the Google website. Google was fined $22.5 million by the FTC, pocket change to the Internet giant.

Also on Whitten’s watch Google was fined $25,000 for obstructing the Federal Communications Commission’s investigation of Wi-Spy and just settled for a paltry $7 million with 38 states attorney general who were investigating.  They’ve also got to make a YouTube video telling people how to improve Wi-Fi network security and have a Privacy Day for employees.  That’s like asking the fox teach the chickens about how to make the coop safe.

It was also on Whitten’s watch that Google combined its privacy and data collection policies across its services without asking users’ consent first.  European data protection officials led by the French are still investigating and action is likely this spring.

Whitten intends to stay on the job through June — not that it makes much difference to users — until her successor Lawrence You takes over.

I guess it makes sense a certain amount of sense that this got announced on April Fools’ Day.  Privacy at Google is a joke.  Google’s executives view the taps on the wrist the Internet giant has received for privacy violations as nothing more than the cost of doing business.

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Did The FTC Find Its Spine In Google Probe? We Need To Keep The Pressure On http://insidegoogle.com/2012/12/did-the-ftc-find-its-spine-in-google-probe-we-need-to-keep-the-pressure-on/ http://insidegoogle.com/2012/12/did-the-ftc-find-its-spine-in-google-probe-we-need-to-keep-the-pressure-on/#comments Thu, 20 Dec 2012 22:13:54 +0000 http://insidegoogle.com/?p=9745 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
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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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Google Gets Antitrust Ultimatum From FTC http://insidegoogle.com/2012/11/google-gets-antitrust-ultimatum-from-ftc/ http://insidegoogle.com/2012/11/google-gets-antitrust-ultimatum-from-ftc/#comments Tue, 13 Nov 2012 00:02:34 +0000 http://insidegoogle.com/?p=9725 Federal Trade Commission Chairman Jon Leibowitz has given Google what Bloomberg News Service describes as an ultimatum to settle the agency’s antitrust investigation in the next few days or face a lawsuit.

Citing unidentified sources, Bloomberg reporter Sara Forden wrote:

“Google has been in discussions with the agency for about two weeks and hasn’t put any remedy proposals on the table, said the people, who declined to be identified because the negotiations are private.”

FTC staff have been investigating whether the Google has been abusing its dominance of the Internet for more than a year.  The staff has reportedly recommended issuing a complaint focused on Google’s search practices and also for misusing its patents to block rivals smartphones.

The FTC has told Google it won’t accept a resolution short of a consent decree, Bloomberg’s Forden wrote,  and is prepared to take action in the next week or two.

Google is continuing its usual happy-face spin. “We continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have,” Google Spokesman Adam Kovacevich told Bloomberg.

At first blush the idea that the FTC is holding out for a consent decree may sound reassuring.  For what it’s worth though, I’m a little concerned that a settlement  might not do enough.

Chairman Leibowitz is expected to step down from the agency soon.  There is speculation that in a nod toward his legacy, he might be willing to agree to a less than adequate settlement, just to be able to say the FTC got the Internet giant on his watch.

Franky, there is a similar concern among privacy advocates that there could be a willingness to accept a weak Do Not Track standard for the same reason.

If the Commission files a lawsuit, the FTC could proceed in its own administrative court or in federal court.  No decision has been made about the venue.

Meanwhile there was a development over the summer that might give Google pause.  The Commission has changed its policy and can now seek “disgorgement” — forcing a firm to surrounded profits as an antitrust penalty.  If the FTC goes that route, it might really concentrate the minds of the geeks in Mountain View.

And don’t forget the other side of the Atlantic.  The EU is pressing Google to resolve its antitrust concerns or face a formal complaint.  That, too, could come in a matter of weeks.

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Get Real Sergey, But Here’s How You Could Actually Help http://insidegoogle.com/2012/11/get-real-sergey-but-heres-how-you-could-actually-help/ http://insidegoogle.com/2012/11/get-real-sergey-but-heres-how-you-could-actually-help/#comments Wed, 07 Nov 2012 20:19:20 +0000 http://insidegoogle.com/?p=9719 Sergey Brin, Google’s co-founder, is getting a little bit of ink for his suggestion that all politicians elected today quit their parties and “govern as independents in name and in spirit.”

Here’s how he puts it in his post on Google+:

I must confess, I am dreading today’s elections.
Not because of who might win or lose.
Not because as a Californian, my vote for President will count 1/3 as much as an Alaskan (actually it won’t matter at all — I’m not in a swing state).
Not because my vote for Senate will count 1/50 as much as an Alaskan.
But because no matter what the outcome, our government will still be a giant bonfire of partisanship.  It is ironic since whenever I have met with our elected officials they are invariably thoughtful, well-meaning people.  And yet collectively 90% of their effort seems to be focused on how to stick it to the other party.
So my plea to the victors — whoever they might be: please withdraw from your respective parties and govern as independents in name and in spirit.  It is probably the biggest contribution you can make to the country.

[If you agree, pass it on to your newly elected officials.]

Come on Sergey, get real. Partisanship has existed since the founding of our republic.  Different people have different ideas about how things should be done and groups coalesce around views and work to get things done.  Nothing wrong with that.

There is something terribly wrong with our political system though and it’s something you can help fix. It’s the way money has completely corrupted the process.

You guys at Google are spending money like drunken sailors in your efforts to buy what polices you want in Washington, DC. To refresh your memory, lobbying disclosures filed in October with the House of Representatives showed Google spent $4.18 million, in the third quarter, a 76 percent increase from $ 2.38 million in the comparable 2011 period. For the first nine months Google’s total lobbying spending hit a record $13.1 million. Google spent $9.68 million in all of 2011.

So, it’s simple.  If you want good government, stop trying to buy our representatives.

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Google’s Dominance Sparks Fear, Draws Antitrust Concerns http://insidegoogle.com/2012/11/googles-dominance-sparks-fear-draws-antitrust-concerns/ http://insidegoogle.com/2012/11/googles-dominance-sparks-fear-draws-antitrust-concerns/#comments Mon, 05 Nov 2012 23:36:40 +0000 http://insidegoogle.com/?p=9703 A weekend New York Times article puts a clear focus on the issues that are drawing antitrust regulators to focus on the Internet giant’s anticompetitive practices.

Written by Steve Lohr and Clair Cain Miller the article, Google Casts a Big Shadow on Smaller Web Sites, explains what’s going on:

Regulators in the United States and Europe are conducting sweeping inquiries of Google, the dominant Internet search and advertising company. Google rose by technological innovation and business acumen; in the United States, it has 67 percent of the search market and collects 75 percent of search ad dollars. Being big is no crime, but if a powerful company uses market muscle to stifle competition, that is an antitrust violation.

So the government is focusing on life in Google’s world for the sprawling economic ecosystem of Web sites that depend on their ranking in search results. What is it like to live this way, in a giant’s shadow? The experience of its inhabitants is nuanced and complex, a blend of admiration and fear.

The Federal Trade Commission staff has recommended bringing an antitrust action against Google. The Times calls the government’s antitrust “scrutiny of Google the most exhaustive investigation of a major corporation since the pursuit of Microsoft in the late 1990s.”

The Times points out that Google has drawn antitrust investigations as it has moved aggressively beyond search and advertising into areas like online commerce and local reviews. The problem is that Google uses its search engine to promote its own products and services, hurting competition and, more important in antitrust law, harming consumers.

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. One stark example was the dramatic drop-off in traffic that occurred on Mapquest’s site after Google placed its Google Maps at the top of Universal Search.

The Times article outlines what happened to the shopping service Nextag

when Google manipulated its algorithm. Traffic referred from Google, where 60 percent had originated dropped by half. Nextag responded by doubling its paid search advertising on Google.

The Times article also relates the story of Vote-USA.org and how it was banished to the hinterlands of search results. The Times talked to Ron Kahlow, who runs the organization and reported:

Last year, Mr. Kahlow said, F.T.C. investigators asked him if he thought his site was a target of discrimination. No, he replied. But since then, he has watched Google promote its tools for finding where to vote and sample ballots, just like his site offers.

“At that time, I didn’t believe it was intentional, but I’m having second thoughts,” he says. “I’m sure they’re aware of the amount of money that’s being spent in politics and I’m sure they’d like to get their fingers in the pie.”

In another example of the Internet giant’s power the Times relates how two local news sites CaryCitizen and Berkeleyside were dropped from Google News with no explanation. The changes came as Google was building up its Google Plus Local service.

Google executives maintain that the changes to the “secret sauce” are all about serving the user and offering him or her what they want.

They’re making that argument because a benefit to the consumer can, under antitrust law, offset the damage done to a competitor. But we can’t let Google executives get away with that dodge; it’s not true.

Users of Google services are not customers — not consumers in the usual sense. We are Google’s product. Our activities across its services are tracked and the digital dossiers that have been amassed about us are used to sell advertising.

And now that Google is moving in to becoming a shopping site — see what happens when you type patio furniture into the search box, for example — the Internet giant is squeezing other comparison sites of the results page. It means Google can get a bigger cut and prices will be higher because of a lack of competition.

This is real harm to consumers; Google has crossed the “red line” that will inevitably draw the antitrust regulator’s ire.

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Pressure Mounts Against Google for Its Anticompetitive Behavior http://insidegoogle.com/2012/11/pressure-mounts-against-google-for-its-anticompetitive-behavior/ http://insidegoogle.com/2012/11/pressure-mounts-against-google-for-its-anticompetitive-behavior/#comments Thu, 01 Nov 2012 23:02:26 +0000 http://insidegoogle.com/?p=9715 Signs that Google will soon face strong antitrust action on both sides of the Atlantic are increasing with a report Thursday from Bloomberg News Service that the the Federal Trade Commission staff has recommended that the Internet giant be sued for unfairly blocking competitors’ access to smartphone-technology patents.

Bloomberg’s Sara Forden reported that a majority of the agency’s commissioners are inclined to sue.  Earlier it was reported that the FTC is considering suing Google for favoring its own services in search results.

Chairman Jon Leibowitz has said the Commission will decide by the end of the year and some have speculated a decision could come shortly after the election.

Two years ago Consumer Watchdog called for a broad antitrust action against Google seeking remedial action that could include breaking the Internet giant into separate companies.

“Such action could include breaking Google Inc. into multiple separate companies or regulating it as a public utility,” I wrote at the time. “Google exerts monopoly power over Internet searches, controlling 70 percent of the U.S. market.  For most Americans – indeed, for most people in the world – Google is the gateway to the Internet. How it tweaks its proprietary search algorithms can ensure a business’s success or doom it to failure.”

Earlier in the week the European Consumer Organization (BEUC) wrote Joaguin Almunia, vice president of the European Commission, who has been leading an antitrust probe of Google’s behavior.  He has said that he would prefer to settle the Commission’s concerns without filing a formal case.  One possible settlement that has been reported to be on the table is to require Google to label its own services as getting favorable treatment in search results.

BEUC said that would not be adequate. “Simply requiring Google to label its own vertical search services would not prevent the company from manipulating the search results and discriminating against competing services,” wrote Mononique Goyens, BEUC’s executive director.

A 2010 Consumer Watchdog 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. One stark example was the dramatic drop-off in traffic that occurred on Mapquest’s site after Google placed its Google Maps at the top of Universal Search.

Goyens letter continued:”

“We expect the European Commission to take a strong stance and protect consumers by exercising its powers under the treaties to sanction dominate companies who abuse the dominance to the detriment of consumer welfare. Net and search neutrality are the guiding principles that must be preserved in order to protect the open Internet.

I couldn’t agree more and there are increasing signs that the FTC on this side of the Atlantic is coming to that point of view as well.

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