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Consumer Watchdog Wants Genentech Exec To Quit Google Or Apple Board

Consumer Watchdog, formerly known as the Foundation for Taxpayer and
Consumer Rights, called on former Genentech CEO Arthur Levinson to pick one board or the other. ?It
took Eric Schmidt far too long to realize that the two roles are
incompatible. That’s not surprising considering the clubby atmosphere
of Silicon Valley,? said John M. Simpson, a Consumer Watchdog consumer
advocate, in a written statement. ?Nonetheless, we’re glad Schmidt
finally did the right thing. We call on Levinson to act responsibly and
choose one company or the other.?

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WASHINGTON, D.C. — The U.S. Federal Trade Commission said it will
continue to investigate the relationship between the boards of Apple
Inc. and Google Inc., after Google’s chief, Eric Schmidt, quit Apple’s board on Monday. A consumer rights group criticized Schmidt for taking too long to leave
Apple’s board, and called on former Genentech CEO Arthur Levinson to choose either Apple or Google. "Nonetheless, we’re glad Schmidt finally did the right thing," Consumer
Watchdog said in a statement. "We call on Levinson to act responsibly
and choose one company or the other."

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Now that Google chairman and chief executive Eric Schmidt no longer
serves on the board of Apple, an industry group is calling for
Genentech chairman Arthur Levinson to choose sides. As of
Sunday, both Levinson and Schmidt served on the boards of both Apple
and Google. Now Levinson is the only one to straddle both boards, a
position that Consumer Watchdog said also presents a conflict of
interest.

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Press Release

CONTACT:

Santa Monica, CA — Genentech Board Chairman Arthur D. Levinson should
quit as a director of either Internet giant Google or Apple to avoid
antitrust violations, Consumer Watchdog said today, following the
resignation of Eric Schmidt from the Apple board. The call from the nonprofit, nonpartisan consumer group came after the
announcement that Google Chairman and Chief Executive Eric Schmidt, who
held the same dual role, was stepping down from Apple’s board.  The
Federal Trade Commission has been investigating for several months
whether Apple and Google had violated antitrust laws by sharing two
directors.

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John Simpson of Consumer Watchdog raised concerns about how users’ personal data is collected, stored and shared. He’s worried about "up-until-now separate databases being merged and
used in ways that haven’t been made explicit." Simpson hopes to see
Microsoft and Yahoo come up with a data retention policy that expunges
personal information in about a month and says that, by default, they
shouldn’t collect behavioral information unless consumers opt-in.

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Microsoft and Yahoo finally tied the knot, but they signed an expansive pre-nup to limit antitrust scrutiny. Vocal Google critic Consumer Watchdog didn’t denounce the deal
outright, noting that "some have suggested" that the tie-up may
increase competition against Google. But the Microsoft-Yahoo deal is a
chance for regulators to "set to the gold standard for privacy
guarantees by Internet companies and for the government to use its
leverage to obtain it," it said. Consumer Watchdog’s John Simpson said
the FTC should take a strong lead on privacy matters. "If the result of
this deal is that there are two stronger Internet search enterprises
who exploit users’ data at the expense of their privacy rights,
consumers are worse off, not better," he said. "Justice and the FTC can
— and must — insist on this."

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John Simpson, an advocate with non-profit group Consumer Watchdog, also
said the Microhoo deal must be closely scrutinized by the Federal Trade
Commission, the Justice Department and the European Commission to
ensure that there are no antitrust violations and that user privacy is
guaranteed. "If the result of this deal is that there are two stronger Internet
search enterprises who exploit users’ data at the expense of their
privacy rights, consumers are worse off, not better," said Simpson.
"Users must have control of their data—whether it is collected and how
it is used. Guarantees of that control must be in place before this
deal is approved. Justice and the FTC can—and must—insist on this."

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Microsoft and Yahoo clearly are bracing for regulatory scrutiny. The news release emphasized that the two companies will "continue to compete vigorously" in other areas, including e-mail, instant messaging and display advertising. It also stressed that the agreement restricts the sharing of search and other data.
Consumer Watchdog in Washington, D.C., called on the Justice Department and Federal Trade Commission to probe the deal for potential antitrust violations and privacy concerns.

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Three-Into-Two Doesn’t Wash

Consumer Watchdog noted the competitive search and advertising
landscape will deteriorate – not improve – if the result is two
enterprises that exploit users’ data at the expense of their privacy
rights. John Simpson, an advocate with the group, said the FTC and DoJ must
insist users retain control of their data, how it’s used, and where its
stored. "Users must have control of their data – whether it is collected and
how it is used. Guarantees of that control must be in place before this
deal is approved. Justice and the FTC can – and must – insist on this,"
he said in a statement.

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