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Inside Google » Clout A Consumer Watchdog Investigation Thu, 28 Aug 2014 02:57:15 +0000 en-US hourly 1 EU’s Google Antitrust Deal Beats FTC, But Still Doesn’t Do Enough Mon, 15 Apr 2013 23:43:27 +0000 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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Did The FTC Find Its Spine In Google Probe? We Need To Keep The Pressure On Thu, 20 Dec 2012 22:13:54 +0000 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 Ruling Shows Need For Do Not Track And Strong Antitrust Action Tue, 20 Nov 2012 00:33:34 +0000 A federal judge’s ruling late Friday in a key privacy case demonstrates the need to implement tough “Do Not Track” rules and to 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

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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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FTC Readies Antitrust Suit Against Google; Consumer Watchdog Called For Breakup Two Years Ago Mon, 15 Oct 2012 23:02:20 +0000 News broke over the weekend that Federal Trade Commission staff is calling for the Commission to bring an antitrust case against Google for abusing its dominance in search,
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an action Consumer Watchdog first called for more than two years ago.

Our original call was aimed at the U.S. Department of Justice Department. Both the DOJ and FTC have antitrust jurisdiction. Our letter asked 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.”

Detailed reports on Friday from Reuters, Bloomberg and The New York Times quoted unidentified sources and said that a 100-page staff report urging antitrust action against the Internet giant was being circulated to the Commission. Four commissioners were reported to be in favor of antitrust action; one was said to be skeptical. A decision on how to proceed could come next month.

The FTC was reported also to be considering action around whether Google is exerting illegal monopoly power with its Android smartphone operating system. Also under investigation is whether it abused patents in an illegal anticompetitive way. The patents were acquired when Google bought Motorola Mobility.

The news stories late Friday were clearly the result of deliberate leaks, more than likely from the FTC. That’s a sign that the Commission is trying to ratchet up pressure on Google, perhaps in an effort to bring about a settlement, rather than taking the case to court. Already the FTC has hired an outside litigator and economist for a possible case, again perhaps as much to signal seriousness and push toward settlement.

On the other side of the Atlantic, the European Commission is in talks about a possible antitrust settlement with the Internet giant. EU Competition Commissioner Joaquin Almunia said last month that the negotiations are “not there yet.” He warned that if Google does not offer “effective solutions” to the complaints he “will be obliged to continue with our formal proceedings.”

Given Google’s track record in the way it has stiffed regulators and one-upped them on both sides of the Atlantic, I’d urge regulators to forget about early settlement talks and file a formal case. They’ll have more leverage to talk after it’s filed. As we said in April 2010, remedies could include:

– Breaking Google into different companies devoted to different lines of business. Search could be separated from advertising. Gmail and its new social networking service, Google+, could be spun off as a separate entity as could YouTube, a Google acquisition that should have been denied at the time of merger. Enterprise applications could be another separate business.

– Google’s importance as a gateway to cyberspace requires a maximum degree of openness and transparency with the potential for government regulation. Arguably Google’s monopoly position and importance to the Internet means that the company should be regarded as a public utility and regulated. Regulations could be designed to open up Google’s ad platform to enable other competitors to compete. Rules could be crafted to create greater transparency in the operation of Google’s ad platform to enable parties to negotiate more effectively – for example: by providing greater visibility into the maximum amount of the highest bid, how many search terms are shown per page, and how Google’s “quality score” is derived and applied. Little, if any, of this information is currently public and openness would contribute to consumer choice and options as well as foster competition.

– Forcing Google to disgorge its monopolistic gains through the imposition of financial penalties. The payment would have to be significant enough to impact Google’s future behavior. Perhaps the amount could be tied to paying back consumers for monetizing their private information and content without compensating them.

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FTC Estimates Google’s Privacy Hack Earned Up To $4 million Mon, 01 Oct 2012 23:58:30 +0000 One of the things you hear when companies try to minimize the impact of privacy violations is an attempt to claim there was no financial harm to consumers. However, in an interesting development the Federal Trade Commission is now publicly estimating that Google’s hack around Apple’s Safari browser privacy settings earned the Internet giant up to $4 million.

The estimate came in the FTC’s response to Consumer Watchdog’s amicus curiae brief opposing the proposed $22.5 million settlement with Google for the violation. We argued that the settlement is deficient because: 1. It includes no permanent injunction precluding Google from violating the “Buzz” Consent Decree; 2. The $22.5 million civil penalty is inadequate; and 3. The proposed deal specifically allows Google to deny it did anything wrong.

Booth Google and the FTC filed their responses late Friday. Frankly, they both claimed about what I expected they would say: that the deal was reached after arms-length negotiations; that it was fair, reasonable and in the public interest; and

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that decisions by an executive branch agency deserve considerable deference from a court.

We’ll have to wait see what Judge Susan

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Illston thinks of all the arguments. What’s next in the case is up to her.

Meanwhile, the interesting new nugget in the FTC’s filing was the estimate of what Google earned by violating our privacy. Megan Bartley, an attorney in the FTC’s Division of Enforcement in the Bureau of Consumer Protection said in a declaration filed as Exhibit A with the FTC response brief: “Using a variety of sources, the FTC estimated that Google profited no more than $4 million from the alleged violation.”

I’ve maintained that the fine is mere pocket change to Google executives. Indeed, the value of the company’s outstanding stock climbed more than $22.5 million the day the proposed settlement deal was announced. The FTC doesn’t want to us to compare the fine to Google’s $40 billion in annual revenue, but rather what Google derived by playing fast and loose with our privacy.

It’s good to see the FTC cite the $4 million figure if that was a basis for the fine. What’s missing, though, is what sources and methods the agency used to make the estimate.

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Judge Orders Google, Oracle To Reveal Any Payments To Writers Wed, 08 Aug 2012 22:32:18 +0000 Ever wonder who is behind some of the opinions expressed by various bloggers.  Could it be that some are being paid to express particular views? Are they hit-men-for-hire?

Well, you’re not the only one to ask.  The difference, though, is that this person can demand answers.  The federal judge presiding in the Oracle v. Google patent infringement case wants to know if either company paid commentators or bloggers during the case. Judge William Alsup’s order is short and to the point:

The Court is concerned that the parties and/or counsel herein may have retained or paid print or internet authors,  journalists, commentators or bloggers who have and /or may publish comments on the issues in this case.  Although the proceedings in this matter are are almost over, they are not fully over yet and, in any event, the disclosure required by this order would be use on appeal or on any remand to make clear whether any treatise, article commentary or analysis on the issues posed by this case are possibly influenced by financial relationships to the parties or counsel. Therefore, each side and its counsel shall file a statement herein clear identifying all authors, journalists, commentators or bloggers who have received money (other than normal subscription fees) from the party or its counsel during the pendency of this action.  The disclosure shall be filed by noon on Friday, August 17, 2012.

It’s not at all clear what prompted Judge Alsup to act.  Both companies have said they will comply.  It was already known that Florian Mueller of the FOSS Patents blog was getting paid by Oracle.   He disclosed that he was a consultant to Oracle in April as the trial was beginning and said Microsoft is a client as well.

So was Google paying somebody?

It’s possible that Google has arrangements that are similar to Mueller’s deal with Oracle.

Complicating the picture is a reality of the Internet and world of blogging.  Many bloggers run ads from Google’s AdSense program.  Google pays them a commission to run the ads.

And there are organizations that receive Google money either as donations or cy press payments in class action suits.  To what extent  — if any — does such money come with strings? Is their at least an unspoken understanding that the recipient won’t bite the Google hand doing the feeding.

Judge Alsup’s order is broad enough that it appears to cover not only the clear case of a blogger for hire, but also cases were ad money was received and where donations were accepted by an organization.

There should be some interesting reading on Aug. 17.

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Google Antitrust Deal In Europe Would Impact U.S. Wed, 25 Jul 2012 23:49:45 +0000 Google — facing the possibility of a penalty of around $4 billion — is trying to cut a deal with European antitrust regulators that would settle the regulators’ objections without having to pay a fine.

It’s not certain that an agreement can be reached, but if one is, it will have a direct impact on the United States. Joaquin Almunia, EU competition commissioner, said that any concessions the Internet giant offers to resolve the EU’s antitrust concerns would be applied worldwide.

“We will look for worldwide solutions; it will not be very useful to get European-wide solutions,” he said.

One of the main complaints against Google is the way it unfairly favors its own properties ahead of competitors in search results. We documented that two years ago in our study, Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets.

In May the Commission said it was concerned that Google was favoring its own services in search, copying material from websites of competitors without permission, shutting out advertising competition and placing restrictions on the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. Almunia told the company to offer changes or face a formal statement of objections with the risk of fines in the billions of dollars. In Europe antitrust penalties can be imposed before a court proceeding.

At the time I predicted that Google would not offer meaningful remedies. Despite my skepticism, the EU is saying that Google is apparently responding. The New York Times quoted Almunia from a news conference Wednesday:

“We were trying to clarify to them how these solutions should be established. They were exploring with us what kind of solutions we were asking for, and now we have enough clarifications so as to start the process of technical meetings.”

“They will try to solve it. And I have reasons to believe that they think it’s worth it.”

Funny how $4 billion concentrates the mind, isn’t it.

Reportedly, one of the things that moved the possibility of a settlement forward was that Google agreed that any concessions it makes on search will apply to all platforms including computers and mobile devices.

I’m sure the EU is acting in good faith. I have my doubts about Google. The real difficulty in accurately assessing the situation is the secrecy that surrounds the negotiations. We simply don’t know what Google has proposed and what the EU wants. When an antitrust case gets to this stage, it really all should be on the public record.

Here is what another critic said, as reported by The New York Times:

For years, Google has said it deserves the benefit of the doubt,” said Jonathan Zuck, president of the Association for Competitive Technology, an industry group heavily financed by Microsoft. “Unfortunately, they’ve played us for fools every time.”

Mr. Zuck praised the commission’s “persistent work,” but said an “effective remedy” required an admission by Google of wrongdoing. “Without that understanding on the part of Google, it will never implement the kind of fundamental changes to its business practices that are necessary to curb these abuses,” he said.

I agree.

Besides the the European antitrust investigation, the Internet giant faces antitrust investigations by the U.S. Federal Trade Commission and several states. Antitrust officials in Korea, India and Brazil are also looking into Google’s business practices. A European deal could well serve as a blueprint for settlements with other authorities. The FTC and the EU have been in close touch about their investigations.

One difference is that the FTC’s probe includes an investigation into whether Google has abused its dominance of the Android operating system. The EU is not looking into that, but Almunia held out the possibility that it might.

Interestingly, in the semi-boilerplate language found in Google’s just-filed Form 10-Q, is a clear indication that the Internet giant finally gets that it is under scrutiny:

We are subject to increased regulatory scrutiny that may negatively impact our business.
The growth of our company and our expansion into a variety of new fields implicate a variety of new regulatory issues, and we have experienced increased regulatory scrutiny as we have grown. In particular, we are cooperating with the regulatory authorities in the United States and abroad, including the U.S. Federal Trade Commission (FTC), the European Commission (EC), and several state attorneys

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general in investigations they are conducting with respect to our business and its impact on competition. Legislators and regulators, including those conducting investigations in the U.S. and Europe, may make legal and regulatory changes, or interpret and apply existing laws, in ways that make our products and services less useful to our users, require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices. These changes or increased costs could negatively impact our business and results of operations in material ways.

I hope the Europeans extract meaningful concessions, though I remain skeptical that will happen. Google has a history of stonewalling and foot-dragging. The best solution would be to break Google into different companies devoted to different lines of business.

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They’re Finally Getting Google’s Number Thu, 24 May 2012 23:15:32 +0000 Consumer Watchdog has long held the view that Google’s executives are hypocrites, claiming their mission is to organize the world’s information and make it universally accessible and useful, while remaining deeply secretive about the company’s activities.

It wasn’t a popular view of the Internet giant. I think many people used to see Google as a feisty start-up offering “cool” products. Many accepted the idea that Google was true to its “Don’t Be Evil” motto.

But two articles this week, I think, make it clear people are coming around to Consumer Watchdog’s view of Google.

First, a report in The New York TimesGoogle Privacy Inquiries Get Little Cooperation — demonstrates how perceptions about the company are rapidly changing to reflect reality. Reporters David Streitfeld and Kevin J. Obrien put it like this:

Google might be one of the coolest and smartest companies of this or any era, but it also upsets a lot of people — competitors who argue it wields its tremendous weight unfairly, officials like Mr. Caspar who says it ignores local laws, privacy advocates who think it takes too much from its users. Just this week, European antitrust regulators gave the company an ultimatum to change its search business or face legal consequences. American regulators may not be far behind.

The article details how Google obstructed and stonewalled regulators worldwide who were attempting to get to the bottom of Google’s Wi-Spy activities. That’s when it sent Street View Cars into 30 countries around the world not only to photograph the roads they traveled, but also to suck up emails, passwords and other data from private Wi-Fi networks in 30 countries.

The Times notes:

The FCC did not see it Google’s way, saying last month the engineer “intended to collect, store and review” the data “for possible use in other Google products.” It also said the engineer shared his software code and a “design document” with other members of the Street View team. The data collection may have been misguided, the agency said, but was not accidental.

Although the agency said it could find no violation of American law, it also said the inquiry was inconclusive, because the engineer cited his Fifth Amendment against self-incrimination. It tagged Google with a $25,000 fine for obstructing the investigation.

Google executives followed their usual playbook and declined to comment for the Times article.

“We don’t have much choice but to trust Google,” Christian Sandvig, a researcher in communications technology and public policy at the University of Illinois, told the Times.

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“We rely on them for everything. Google doesn’t seem to think it ever will be held accountable. And to date it hasn’t been.”

The second example of the new view of Google came at the influential Wall Street Journal

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affiliated online website, All Things D. Deputy Managing Editor John Paczkowski analyzed the French data protection authority’s discontent with Google’s response to questions about its new privacy policy. The French complained, “For a large

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number of questions, the elements provided do not give a precise, clear and comprehensive response to our questions.” Paczkowski offered this analysis:

Google not only doesn’t want to answer these questions, it doesn’t even believe it is obligated to do so. Indeed, it essentially said as much back in April, when it specifically questioned the authority of the CNIL and the Article 29 Data Protection Working Party to even investigate it. From Google’s April 5, 2012, response to the CNIL:

1) What is the legal basis for the Working Party to act as a regulatory body, or to mandate the CNIL to conduct a regulatory review on behalf of 26 other independent DPAs?

2) What law is being applied to this review?

3) Could the Working Party explain the process being followed and the ultimate aim of the review?

Questions respectfully asked, certainly. But they clearly reflect an uncooperativeness and, more to the point, an overweening arrogance that’s so prevalent these days that it might as well be one of Google’s hallowed “10 Things We Know To Be True.”

I think these articles reflect a seachange in the popular attitude toward the Internet giant. But it’s not just a change in how Google is perceived that the folks in the Googleplex need to be concerned with. There are active investigations underway by antitrust authorities on both sides of the Atlantic. Privacy breaches are also a focus of regulators’ attention.

And then back to the Wi-Spy scandal. I checked in today with the office of Connecticut Attorney General George Jepsen. He’s leading the multi-state investigation of the incident being conducted by 40 state attorneys general. A spokesperson made it clear; the probe is “active and ongoing.”

People are finally getting Google’s number. I’m betting that despite the Internet giant’s self-righteous arrogance, Google will be held accountable.

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Google faces questions from Congress; session should be public Fri, 17 Feb 2012 23:12:57 +0000 Google is facing more questions from Congress. The Internet giant’s deliberate circumventing of privacy settings in Apple’s Safari browser — that’s the one used on iPhones and iPads — is prompting the outrage. The deliberate privacy breach was discovered by Stanford University researcher Jonathan Mayer and reported first by The Wall Street Journal.

Just a few weeks back Google was under scrutiny over its plans to combine privacy polices and share users’ data across its various services. Rep. Mary Bono Mack (R-CA), chair of the House Commerce, Manufacturing and Trade Subcommittee, called in Google Executives Pablo Chavez and Michael Yang for a closed-door briefing.

We protested that it should be open, but didn’t carry the day. After the session, Rep. Bono Mack told reporters that she wasn’t impressed with Google’s explanations.

We then wrote a letter to her and ranking member G.K. Butterfield (D-NC) urging them to call CEO Larry Page before the subcommittee.
With Google’s latest privy breach, Bono Mack issued news release titled, ” Bono Mack Calls Google Back to Capitol Hill for Explanation of Latest Privacy Flap.” It said:

“Google has some tough new questions to answer in the wake of this latest privacy flap, and that’s why I am asking them to come in for another briefing. Even if unintentional, as the company claims, these types of incidents continue to create consumer concerns about how their personal information is used and shared. Companies need to be open about what they’re collecting, and how that information is used. Just as importantly, this needs to be clearly communicated to consumers. While I am determined to get to the bottom of this, some of it simply may be ‘growing pains.’ That’s why it’s important to sit down and figure out how we can better protect consumer privacy in the future.”

Not clear to me was whether she wants another closed-door meeting, so I called her office and asked. A spokesperson explained that they are still working out the details, who would come, whether it would be open or what. At

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this point, the spokesperson said, it could go either way.

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it’s no surprise that I made a strong pitch to make sure it’s public and that CEO Page does the explaining.

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EPIC Files Suit To Block Google’s New Data Policy Fri, 10 Feb 2012 00:26:24 +0000 Our friends at the Electronic Privacy Information Center (EPIC) went to court Wednesday to block Google from combining data gathered from its various services without users’ consent.

The Internet giant recently announced it would consolidate more than 60 privacy policies into one and that it would combine a user’s data collected on various sites into one profile. What you did on YouTube would be commingled with data from your search queries and your Gmail account, for example.

Google has spun this as being aimed at “improving the user

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experience.” In fact, it’s all about amassing even greater digital dossiers on people so they are better targets for advertising. Remember, our information is Google’s lifeblood. We’re not Google’s customers; we’re the product.

The big problem with Google’s unilateral action is that it appears to violate the terms of the “Buzz” consent settlement with the Federal Trade Commission. I called for the FTC to determine if there’s a violation last week. Rep. Ed Markey (D-MA) and Rep. Joe Barton (R-TX) asked the same question in a letter to FTC Chairman Jon Leibowitz.

Google’s consent agreement with the FTC came as a result of the “Buzz” debacle in which the Internet giant displayed users email addresses without their consent as it tried to launch a social network. Under the terms of the consent

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agreement, Google can’t use data it has collected in new ways unless users opt-in to the new use.
Click here to read the consent agreement.
EPIC today filed a complaint and a motion for a temporary restraining order and preliminary injunction in Federal Court in Washington. It wants to compel the FTC to act before the new policies are implemented March 1.

Google’s plan raised concerns in Europe, where the Article 29 Working Party, a group representing European data protection officials, asked Google to “pause” implementation of the new polices until the group could determine how they affect users’ privacy. The French data protection agency is taking the lead in the analysis. So far, Google has rebuffed the European request.

“We believe Google went way over the line in a variety of ways,” Marc Rotenberg, EPIC’s executive director, told USA Today. I couldn’t agree more.

The best thing that could happen now is for the FTC to act immediately and block Google’s arrogant, unilateral action. Then there’d be no need for a hearing on EPIC’s motion.

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FTC Will Probe Google’s Search Update Sat, 14 Jan 2012 01:12:45 +0000 Google’s latest change to its search engine, dubbed “Search plus Your World” apparently has drawn the scrutiny of the Federal Trade Commission because of antitrust concerns, according to Bloomberg News.

I’d say the agency, already investigating the Internet giant’s business practices, was correct to add Google’s latest search changes to the list of its concerns.  As we’ve shown in the past, Google clearly favors its own properties in universal search results.  The latest change in search appears to be yet another way Google unfairly favors its own properties, in this case its new social network, Google+.

Bloomberg News Reporters Sara Forden and Brian Womack broke the latest news about the FTC Friday afternoon:

“The U.S. Federal Trade Commission is expanding its antitrust probe of Google Inc. (GOOG)the world’s most popular search engine, to include scrutiny of its new Google+ social networking service, according to two people familiar with the situation.

“The competition issues raised by Google+ go to the heart of the FTC’s investigation into whether the company is giving preference to its own services and whether that practice violates antitrust laws, said the people, who declined to be identified because the investigation isn’t public.”

In case you missed it, Google launched “Search, plus Your World” on Tuesday.  If you are logged into a Google account and enter a search, Google returns relevant results from content posted by you and your friends on Google+, the company’s new social network.  The Google+ data is interspersed into results from across the web.  You can click to opt out of this personalized search and see only the traditional results.  Another click displays only results from Google+.

Google Fellow Amit Singhal gave an example of how it works in a blog post announcing the new feature. He explained how as a boy his favorite fruit was something called the Chikoo.  A few years ago, he wrote, his family got a puppy and named it Chikoo. He has shared a number of photos of the dog with friends. Now with Search plus Your World, when Singhal enters the query “Chikoo” his results page returns both photos of the fruit and his dog.

Frankly, I’ve been trying to get my head around the implications of this new feature all week.   On the plus side, it only works if you log into a Google account.  On the negative side is the fact that once you do sign in, you get personalized search by default. You can opt out. The better choice would be to make the new feature opt-in.  You would have to turn  it on if you want it.

The antitrust issues arise because of the way Google treats the results from its own social network.  It searches the posts of your friends on Google+, but doesn’t do the same for Facebook or Twitter.
Some have suggested this in itself is anti-competitive.  It might well be if the other networks wanted their data searched. The fact of the matter is that neither Facebook nor Twitter allow Google access to “crawl” that data.  Twitter used to give Google access, but the deal fell apart over the summer.

Microsoft’s Bing does search Tweets and, according to All Things Digital,  may be paying $30 million for the rights. It does seem wrongheaded to argue that Google must search the content of other social networks when they won’t provide access.

But there still is a serious antitrust issue: When you enter a name into Google’s search bar, if the person is on Google+, their picture and a link to their profile is auto-suggested. Try it with Eric Schmidt or Britney Spears.  Click on it and you get the Google+ profile at the top of your results.
This happens whether you are logged into a Google account or not.  If you are logged in, Search plus Your World also seeks results from content inside the Google+ network.  Logged in or not, the auto-suggest feature suggests Google+ profiles when the name matches a Google+ user. Clearly the feature is designed to drive users to Google+.

Now while we can’t really expect Google to search posts on Facebook or Twitter when neither gives access to that content, we should insist that Goole give the same sort of treatment to the social network pages that are part of the public web.

Both Facebook and Twitter have pages that are analogous to Google profiles and are available on the public web. They don’t get the same preferential treatment as Google profiles.

As John Battelle points out in his Searchblog, Google used to claim its results were unbiased.  He quotes from the company’s original letter to shareholders in 2004, “Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating.”

It used to be that Google said they wanted users to get off their site and on to the site they were seeking as quickly as possible. Naturally there was a hope that they would frequently choose to click on an ad to get there.

Those days are long gone. Everything Google is doing now is attempt to keep you on its sites as long as possible so it can gather as much information about you as possible. Look at the menu bar that drops down to offer links to many Google properties and services when you go to Google’s recently redesigned homepage for a simple search.

And, it’s  quite clear that Google is favoring its own properties in search results. Google plus Your World is simply the latest example. That’s one of the reasons why the Internet giant is under well deserved scrutiny by the European Commission, the Federal Trade Commission and at least six states attorneys general for possible antitrust violations

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Senators Call for Google Antitrust Probe Tue, 20 Dec 2011 00:59:42 +0000 The top Senators on the Judiciary Committee’s Antitrust Subcommittee are expressing concern to the Federal Trade Commission over Google’s business practices and the Internet giant’s impact on competition in Internet search and commerce.

Monday’s letter to FTC Chairman Jon Leibowitz from Sen. Herb Kohl (D-WI) the panel’s chairman, and Mike Lee (R-UT), the ranking member comes after Google Executive Chairman Eric Schmidt testified before the subcommittee in September. The Senators’ letter said:

“We believe these allegations regarding Google’s search engine practices raise important competition issues. We are committed to ensuring that consumers benefit from robust competition in online search and that the Internet remains the source of much free-market innovation. We therefore urge the FTC to investigate the issues raised at our Subcommittee hearing to determine whether Google’s actions violate antitrust law or substantially harm consumers or competition in this vital industry.

You probably recall that Consumer Watchdog had been calling for Schmidt’s testimony for more than a year, before he finally agreed — under the threat of subpoena — to appear before the Antitrust Subcommittee.  Part of that campaign included satirical videos, like “Supercharge,” which featured avatar style-animations of Schmidt and CEO Larry Page.

And when Schmidt finally did show up to testify, we sent our “Google Track Team” to demonstrate in the Dirksen Senate Office Building and dramatize the need for privacy laws and Do Not Track regulations.

The Senators’ letter took “no position on the ultimate legality of Google’s practices under the antitrust laws and FTC Act,” but urged that the concerns raised at the hearing “warrant a thorough investigation by the FTC.”

The FTC is already on the case, having confirmed last summer that is investigating Google’s business practices.  Given the partisan rancor that is the current reality in Washington, this bipartisan letter sends a powerful message of support to the FTC’s landmark investigation.

And, it’s not just the FTC that’s asking the right questions. As Kohl and Lee noted in their letter, attorneys general in Texas, New York, California, Ohio, Mississippi and Oklahoma also opened full-scale investigations.  The European Union is in the second year of its own investigation.

The Senators letter notes that, “rather than act as an honest broker of unbiased search results, Google’s search results appear to favor the company’s own web products and services.”  They go on to suggest that “under the the FTC’s mandate to protect consumers from misleading and deceptive practices, the FTC should seriously consider requiring Google to label its ‘inbox’ or ‘places’ listing (or other similiar listings), as Google products, just as it labels paid search results.”

You may recall how our study, “Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets,” documented that with the launch of “universal search” Google properties had an unfair advantage over competing sites.

Consumer Watchdog has been calling for antitrust action against the Internet giant since 2010. Clearly policymakers are finally listening.

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