Category: Web 2.0 & Democracy

The EC approval of Google’s DoubleClick takeover

Statement on the EC Decision on Google/DoubleClick
Jeff Chester, Center for Digital Democracy

By failing to impose safeguards, EC regulators have helped strengthen a growing digital colossus that will now be in a dominant position to shape much of the global future of the Internet and other online media. The EC [DG Comp] appears to have embraced the FTC’s flawed analysis of the online ad market. It represents the failure of antitrust regulators to understand and respond to the growing consolidation of control over online ad delivery, data collection, and the funding of content. This decision will have profound and unfortunate consequences for the Internet’s evolving role as a democratic communications medium.

EU and US antitrust regulators have also perversely set the stage for Microsoft’s goal of acquiring Yahoo!, furthering more concentration of control in the new media sector. Instead of ensuring competition, DG Comp and the FTC have literally paved the way for the emergence of a global digital duopoly over online advertising (which is the principal way online content is funded). By permitting Google to dramatically grow in clout, regulators will have to likely enable the further growth of a # 2 competitor to Google—which will be Microsoft.

US and European policymakers must reform the antitrust process to reflect the realities of the digital market era, where competition, data collection, and content creation are seamlessly intertwined. In today’s digital marketplace, the company that controls the most data about consumers and has the global reach to connect to them raises both anticompetitive and privacy concerns. An antiquated and piecemeal antitrust approach fails to protect citizens, consumers, and competition.

The Center for Digital Democracy, which opposed the Google/DoubleClick merger in both the U.S. and in the EC, will continue to press policymakers to play a more responsible forward-thinking approach to competition and consumer protection for online and interactive media.

Consider this a form of `let’s help Google try and be more honest about privacy and data collection’ public service.

Excerpt from PC World:
“Google’s YouTube will soon give marketers more data about viewership of its videos, so that they have a better understanding of clips’ reach and effectiveness at boosting brand awareness and sales.

The online video site plans to make more granular metrics available in this year’s second and third quarters, including data about the usage of YouTube videos that are embedded in external sites, said Brian Cusack, YouTube sales team manager.

“YouTube has enormous amounts of data, but not great reporting on that data yet,” Cusack said during a keynote speech at the eRetailer Summit….YouTube…is building models to distinguish content that is universally interesting from content that is locally interesting, in order to make that useful for its advertising customers, Cusack said.

YouTube to Improve Usage Metrics: New data about Google’s YouTube video viewership will be availabletp marketers. Juan Carlos Perez. IDG News. March 3, 2008

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Microsoft is set to acquire behavioral microtargeting and “marketing automation” specialist YaData. YaData’s software helps identify “behavioral micro-segments” [thats our behaviors, btw]. As YaData explains, “[M]icro-segments may overlap, reflecting the true multi-dimensional nature of customers and their changing habits. The continuous dynamic discovery and management of focused micro-segments allows marketers to understand and act upon changing market trends and gain rapid results for a real competitive differentiator. In order to act upon these changes, it is vital that marketers be able to routinely and autonomously launch the discovery process and manage the entire segment lifecycle…” [the managing, we presume, is of people’s behaviors and attitudes].

“YaData fully believes in the potential of behavioral targeting to enhance the value of online advertising for publishers, advertisers and users,” said Amir Peleg” in the press release announcing the sale. Microsoft officials claimed that as YaData’s technology became part of the company’s “advertising platform” they would “continue to adhere to its high standards for the protection of consumer privacy.” As Microsoft moves closer to acquiring Yahoo!, privacy advocates will need to analyze how the company’s recent acquisitions and developments related to online advertising require real safeguards–not just a reflexive we-care-about-privacy approach.

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Time Warner’s `Platform A’ Data Collection System: 3 billion online ads a day bolstered by $1 B in online ad company acquisitions

Time Warner has been buying up online ad properties to bolster its AOL and Advertising.com subsidiaries. AOL exec Randy Falco, as reported in Advertising Age [Feb. 26, 2008, sub. required likely] told interactive marketers that “[W]e have Platform A, the largest ad network in the world.” Falco said that 3 billion ad impressions were being delivered daily by the AOL networks. He also said that “[W]e spent with the help of Time Warner about a billion dollars to acquire [Quigo, Tacoda, Third Screen Media and AdTech] over the past year.”

IAB’s new “Privacy Principles”=A Failure to Protect Consumer Privacy

The IAB has embraced a `circle the data collection and micro-targeting digital wagon’s’ with its new privacy principles. Instead of embracing a policy that truly protects consumer privacy, IAB members are trying to hide behind the same failed approach they have led to governmental inquiries in the US and the EU. The IAB should have adopted rules so that no data can be collected without full disclosure and prior consent of the consumer, as well as other fair information collection principles. The IAB’s proposed new PR campaign to promote the role of interactive marketing will undoubtedly by slick–but won’t be honest. That’s why my CDD will keep telling the FTC, the EU and the public about what really goes on with data collection and digital marketing. These slightly refurbished fox-watching-the-data-hen-house-privacy principles won’t provide any substantive protections for consumers. The failure of the IAB to acknowledge key issues related to sensitive data–including children, teens, financial (think subprime mortgage-related) and health–is a glaring failure of the group’s ability to do what is required to protect consumer privacy.

The IAB is trying to help its members dodge the digital privacy data bullet. But privacy advocates and officials concerned about consumer welfare in the digital age will eventually force the needed changes. What’s sad is that instead of playing a leadership role in the privacy debate, the IAB is attempting to stick with the past. Don’t they realize that change is coming?

Broadband Video: TV that watches us

The privacy issues related to the growing field of broadband video distribution measurement requires debate and policy safeguards. Here’s a telling quote from a recent presentation by Video Measures about its online video tracking technology that connects directly with a Flash video player: “This allows us to collect every interaction by every viewer inside every video. So for the first time since the dawn of television, video publishers and video advertisers can understand how their audience is engaging, or often times isn’t, with their content.”

They call their business, in part, “measuring the behavior of Internet video audiences.”

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Google & Microsoft’s Antitrust Teams: the Digitally Well-Connected

Who will represent the interests of the public as Google and Microsoft (and others) scoop up large chunks of the digital eco-system? Here’s an excerpt from Legal Times [“Microsoft Lawyers Map out the Bid for Yahoo.” Feb. 11, 2008. reg. required] on the former federal antitrust officials working for Google and Microsoft:


“Google does have a team of veterans representing its interests in the Yahoo bid. David Gelfand, a Washington antitrust partner at Cleary Gottlieb, and Susan Creighton, Washington antitrust co-chair at Wilson Sonsini, both helped Google get its merger with DoubleClick past federal regulators at the Federal Trade Commission last year. And Creighton was director of the Bureau of Competition at the FTC before joining Wilson Sonsini in 2006.

Microsoft, too, has a connected advocate in [Charles] Rule. When he goes to the Justice Department, he won’t need introductions. Rule worked with Thomas Barnett, the head of the Antitrust Division, while the two were partners at Covington & Burling. Rule has also worked with Barnett’s deputies. David Meyer, now deputy assistant attorney general for civil enforcement, served as Rule’s special assistant in the Antitrust Division in the late ’80s and then worked with him at Covington. (Skadden partners Michael Weiner in New York and James Venit in Brussels, are representing Yahoo on antitrust matters.)”

Microsoft’s Digital Ad Vision: Part 2

From this week’s Microsoft’s “Strategic Update [Feb. 4, 2008]. Excerpt:

“Advertising is a key part of a number of the opportunities that I talked about, and the key probably right now for us to continue to grow our advertising footprint starts with what we’re doing with search and portal. We have made good progress in that business. It is growing. Since our start four years ago, we now have what I would call a very credible search product, a very credible advertising platform. We’ve got good trajectory. This was, in some senses, the best time for us to ask ourselves, what else can we do to make ourselves even more effective in this business?
And in a sense, the fact that we’re in a stronger position now than we were 12 months ago actually makes this an easier acquisition to consider, even though, as I said in my letter to Jerry Yang, we did have discussions a year ago with Yahoo! about combining the businesses. People say, what are you doing here? Well, what we’re trying to do is take some momentum that we have and ask, how do we really increase that momentum even further? What else can we do?
And the truth is, either on our own efforts or, hopefully, now that we’ve proposed this acquisition, on our efforts merged together with Yahoo!, there are really four things we get a chance to work on. First and foremost is to expand our R&D capacity. We’re going to have to innovate like crazy to get the position want to have in this market. We’re going to have to innovate in the ad platform. We’re going to have to innovate in core search. We’re going to have to invest in new, emerging user experiences —mobile, social media, video, entertainment experience. We need the R&D capability to really compete with the market leader.
We continue to hire people and transfer people. But in fact, bringing together Microsoft and Yahoo! will allow us, because of the fantastic engineering talent both at Yahoo! and at Microsoft, we get more capacity more quickly. We get a chance to not have to think so much about how do we not use the capacity we have, but how do we deploy this incredible team to make sure that we’re doing everything and more that the market leader might be doing?”

The Microsoft/Yahoo! Threats to Privacy Issues Exemplied by Ad Industry Reaction to Deal

Once again, we thank the ad industry for writing our blog (and regulatory!) copy: “”I think what we lose in being able to negotiate with both of them we’ll gain with new opportunities. The biggest opportunity would be to leverage Yahoo’s behavioral targeting across Microsoft’s relationships with Facebook, XBox and Massive, which has the ability to dynamically insert ads in console games.”–Andrea Kerr Redniss, SVP, Optimedia US.”

from: Madison Avenue: We Love MSFT-YHOO. Silicon Valley Insider. Feb. 1, 2008.

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