Tag Archives: Do No Track

Economy

Consumer Watchdog Asks FTC To Release Staff Report In Google Investigation

FTC

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

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

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

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

Read Consumer Watchdog’s letter here.

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

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

Read the Politico article here.

Read The New York Times article here.

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

Consumer Watchdog’s letter to the Commission today continued:

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

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

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

Uncategorized

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

FTC

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

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

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

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

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

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

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

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

But we need to look at Google’s market role – and behavior – through a different prism. Google is not just a “search engine company,” or an “online services company,” or a publisher, or an advertising platform. At its core, it’s a data collection company.

Its “market” is data by, from and about consumers – you, that is. And in that realm, its role is so dominant as to be overwhelming, and scary. Data is the engine of online markets and has become, indeed, a new asset class…

Now, the FTC. has another chance to protect consumers, promote innovation and ensure fair competition online. In making its decision, it must understand that while Google may be the runaway leader in Web search and online advertising, its most troubling dominance is in the marketplace of private consumer data. If real competition in this area can be restored, I am confident that market forces will provide the incentives necessary for companies to offer attractive services and relevant, engaging ads without violating consumer privacy.

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

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

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

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

Meanwhile, the states attorneys general must keep their investigations open and aggressive in case the FTC falters again.  We need to keep the pressure on; it would be a sad situation if we have to rely on  the European Commission to solve our antitrust problems for us.

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