Category: Department of Justice

Two Words on Why the FTC’s Self-Reg Approach is Wrong: Financial Meltdown

It has been deregulation, including forms of self-regulation, which led to the current financial crisis.  Regulators and most policymakers looked the other way, while many from the investment community created a Ponzi scheme bigger than Bernie Madoff’s.  The online marketing of mortgages and loans played a role in the `borrow’ and `buy’ culture which contributed to the economic mess we are in.

It’s now more important than ever that online marketing, including the structure of data collection and privacy, be regulated.  Congress has to act to make sure consumers understand the loans and other financial products they are being offered interactively online.  The financial crisis, noted Google, is actually fostering the growth of online marketing (as consumers look for less expensive ways to shop).   As Google recently explained to advertisers, the “slowdown is actually accelerating the use of consumer online shopping for goods and services.”  The “mass market is now online,” they noted.

Consumers need to completely understand and fully control how data is collected and used when they seek financial services.  The behavioral targeting system involved with mortgage loan sales, we believe, is totally unknown to consumers (and sadly, regulators).  That’s why my group and others criticized last week’s FTC report.  It’s self-regulatory approach is based on a failed policy (from the people on both sides of the aisle who got us into this mess).  We can have both regulation/fair rules and make the commercial market prosper.  It’s time for the online ad industry to support a regulatory policy that will help make our financial future more secure.

Google Lobbying: Why Congress Should Not Use the new YouTube Senate and House Video Hubs

Google is taking a lobbying tactic developed in part by CSPAN years ago–offer members of Congress a free service so they can be seen by the public.  That kind of electronic or digital campaign contribution helps insure that Congress will think twice about biting (or regulating) the video hand that feeds.  Google’s new YouTube Senate and House Hub channels raise a number of concerns and policy questions.

For example, what happens to the user data as people click on the Congressional YouTube channels?  Does Google get to collect, analyze and use such data for its growing political online advertising business?  Beyond privacy, should Congress be endorsing a private for-profit venture as the principal access point voters and constituents need to use?  Does the use of YouTube create a potential conflict of interest for members of Congress who will need to regulate Google–on such things as competition (the DoJ recently described Google as a monopoly); privacy, consumer protection, etc (remember, Google sells all kinds of ads for mortgages, credit cards, junk food, health remedies, etc.).

It’s not a coincidence perhaps that Google’s YouTube congressional channel announcement comes at the same time the company is expanding its online ad business for politics.  As Ad Age reports this week,“The end of an election season usually means dismantling the campaign apparatus until the next cycle. But not at Google; not this year…Rather than packing it all away until 2010, it’s hoping to build a year-round political-advertising business one House seat and hot-button issue at a time.  “There are 500,000 elected officials in the U.S. With the advances we’ve made in geo-targeting, we think this will be part of every political campaign in the country, as well as issue campaigns,” said Peter Greenberger, Google’s director of election and issue advocacy…Google doesn’t yet offer targeting based on congressional districts, but with ZIP code and city targeting, politicians and advocacy groups can cobble together a reasonable approximation of a congressional district.”

The in-coming Obama Administration has had the support of Google’s CEO, and company officials have played a role in the transition.  But the new administration should develop a digital outreach approach to the public which is public–and non-commercial–in nature.  It shouldn’t show any favoritism, even if Google is the leading search and video service.  It should be a change.org--not a government via dot com.

see: “Election  is Over, but Google Still Chasing Political Spending.”  Michael Learmonth.  Advertising Age.  January 12, 2009.

Outside DoJ Expert Litvak on Why Google/Yahoo Deal was Opposed: “Google had a monopoly”

From American Lawyer Daily’s interview with Sandy Litvak (the outside expert DoJ asked to review the now scuttled Google/Yahoo search ad combine). Excerpt: “Google Inc. and Yahoo! Inc. called off their joint advertising agreement just three hours before the Department of Justice planned to file antitrust charges to block the pact, according to the lawyer who would have been lead counsel for the government. Sanford “Sandy” Litvack left Hogan & Hartson in September to consult for the department’s antitrust division on a possible court challenge to the Web giants’ agreement. The companies abandoned the deal in November after the Justice Department informed them it would seek to block the deal. “We were going to file the complaint at a certain time during the day,” says Litvack, who rejoins Hogan & Hartson today. “We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.”…The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade.

“It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly,” Litvack says.


source: Hogan’s Litvack Discusses Google/Yahoo. Nat Raymond. TheAmLaw Daily. Dec. 2, 2008

Google’s “Policy Fellowships”–Self-Serving Efforts to Help Ward Off Privacy and Online Marketing Protections?

Google has selected 15 organizations for its 2009 “Google Policy Fellowship.” Fellows are funded by Google and will work on “Internet and technology policy” issues over the summer. Take a look at some of the groups it selected and what they say the projects will be (and their positions on Internet issues). And then ask–is Google working to help undermine the public interest in communications policy? Think online privacy and interactive marketing as you read these following excerpts from a number of these groups:

“The Competitive Enterprise Institute is a 501(c)(3) non-profit public interest organization dedicated to advancing the principles of free enterprise and limited government. We believe that individuals are best helped not by government intervention, but by making their own choices in a free marketplace…Electronic privacy: CEI seeks to reframe the online privacy debate in terms of the potential benefits to consumers of greater information sharing, transparency, and marketing. Fellows will explore competing privacy policies and how they are evolving as the public grows more aware of privacy risks. This research will also encompass privacy-enhancing technologies that empower consumers to safeguard personal data on an individualized basis.”

“The Progress & Freedom Foundation (PFF) is a market-oriented think tank that studies the digital revolution and its implications for public policy… Online Advertising & Privacy Policy Issues: PFF defends online advertising as the lifeblood of online content and services, particularly for the “long tail,” and emphasizes a layered approach to privacy protection, including technological self-help, user education, industry self-regulation, and enforcement of existing laws, as a less restrictive—and generally more effective—alternative to increased regulation.”

“The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world… Privacy and data security: benefits and costs to consumers of online information flows, and the effects of alternative privacy policies on consumers and the development of the Internet.”

“The Cato Institute’s research on telecommunications and information policy advances the Institute’s vision of free minds and free markets within the information policy, information technology, and telecommunications sectors of the American economy…Information Policy: Examining how increased data sensing, storage, transfer, processing, and use affect human values like privacy, fairness and Due Process, personal security, and seclusion. Articulating complex technological, social, and legal issues in ordinary language. Promoting the policies that protect these human values consistent with a free society and maximal human liberty.”

Google is also funding fellowships at other groups, including the partially Google funded Center for Democracy and Technology. The CDT connected Internet Education Foundation (which helps run the Congressional Internet Caucus, where Google is a corporate Advisory member) also will house a Google Fellow. There are a few public interest groups hosting Fellows that have an independent track record, including Media Access Project, EFF, and Public Knowledge. But awarding Fellowships to groups which will help it fight off responsible privacy and online marketing safeguards provides another insight into Google’s own political agenda.

Why Google Can’t Say a Word that Starts With “P”—Privacy

The senior execs and DC lobbying team at Google really have a major problem addressing one of the company’s gravest problems–its lack of leadership protecting consumer/citizen privacy. While Google claims to reporters and others it’s been proactively strengthening its privacy policies, most of the changes have come as a result of pressure from policymakers and privacy advocates.

This week, Google released a booklet which “spelled out…2009 policy priorities” for the new Administration and Congress, including several Internet related issues. The booklet’s release coincided with a speech Google CEO Eric Schmidt gave at the New America Foundation in Washington, D.C. Missing from the booklet’s agenda was any discussion of privacy or the role and structure of online advertising (You would never know, for example, that Google was just forced by the Department of Justice’s antitrust division to drop its proposed deal with leading rival Yahoo!).

Google should be playing a leadership role supporting the enactment of serious privacy rights for the public–including “opt-in,” real transparency, user control, limits on retention, etc. If Google believes its golden digital goose will be baked once consumers better understand and control how they are being profiled and targeted, they should examine how it defines corporate social responsibility. But Google’s current approach—we can’t admit we are collecting your data for interactive marketing and cannot even say the word privacy in public-– will ultimately have consequences for Google’s future–including its share price.

Google’s DC Lobbying Office Warned Company About Now Scuttled Deal with Yahoo

The enterprising columnist Kara Swisher has done terrific work analyzing the now scuttled Google/Yahoo alliance. She has reported that Google’s lobbying office in Washington, D.C. actually tried to convince top company officials to not pursue the deal. The Google D.C. lobbyists correctly understood that the company is now under the “radar” of a growing number of regulators and privacy advocates from around the world. The failure of the company to heed this sound advice illustrates how its top management is out of touch with the realities of its own market and societal impact.
Here’s an excerpt from a recent Kara “Boomtown” column: “Early on, that was also a big worry of Google’s own operatives in D.C., who expressed concern–largely ignored at HQ, where execs really do see themselves as not even slightly evil–about its growing image as a scary behemoth.”

Online Ad Privacy Watch: Google Adding DoubleClick to its AdSense System

Policymakers will need to closely examine the role DoubleClick will play in collecting, analyzing, and helping profile consumers (whether they are online, seeing a video, or using a mobile device, for example). Here’s an email Google is reported sending out this week. My bold:

“We understand that the recent economic turmoil has created a lot of uncertainty in the lives of AdSense publishers. During these difficult times, we’re continuing to invest in innovations that improve publisher monetization and advertiser value in the content network.

We’re focusing on further developing our product offerings and boosting ad performance for publishers. We recently announced advancements in AdSense for search and experiments to make ads more effective. We’re bringing DoubleClick technologies to AdSense publishers, and we’ll continue to launch new products and features. We’re also continuing to improve our offerings for AdWords advertisers, making it easier for them to target the Google content network. Features for advertisers, such as the new display ad builder, are designed to improve ad performance on AdSense publisher sites.

We’ll keep driving technological progress, but our best asset will always be our publisher partners. The strength of AdSense lies in the value of the content you bring to users and the quality of the sites you bring to advertisers. Our success is tied to yours. We look forward to partnering with you for the long term, and remain dedicated to helping you succeed.”

Attention Google & Tim Armstrong: `Town Hall’ on Proposed Yahoo Deal Must Include Consumer, Privacy and Civil Society

Ad Age reports that Google sales exec Tim Armstrong “is calling for a town hall meeting with the Association of National Advertisers.” [sub. may be required]. The ad association has come out against the proposed Google/Yahoo search ad combine. But such a meeting shouldn’t be a closed door `only the ad biz’ event. By now, Google’s key execs should recognize that the search and online ad market is connected to such issues as privacy, the state of competition, and the future of funding diverse content online. This isn’t an issue that should be constructed by Google as an insider deal. The full range of public policy issues must be debated–including the participation of independent advocates and academic experts to discuss privacy and related concerns. Let Google, the advertisers, critics, supporters, and those in-between have their say–and make it available prominently on YouTube.

A Op-ed Supporting a Google/Yahoo Deal by a Lawyer Who Recently Represented Google?

Glenn B. Manishin, an antitrust attorney, wrote an op-ed yesterday [reg. required] in the San Jose Mercury News which supported the proposed Google/Yahoo alliance. We take no issue with Mr. Manishin expressing his opinion (although we do profoundly disagree with his analysis and conclusions). But we do find it disconcerting to read his resume and see that Google is listed as his recent client [he’s now at a different firm]. Such a disclosure to readers should have been a prominent part of his article. Here’s the excerpt from Mr. Manishin’s CV [with one client in our bold]:

Partner, Kelley Drye & Warren LLP (2001-08) court
Chaired DC/VA Litigation Practice for this New York-based firm and architeched its expansion from legacy telecom regulatory compliance to the policy and legal disputes affecting the new economy. Representative clients included Oracle, Computer & Communications Industry Association (CCIA), Google, Recording Industry Association of America (RIAA), ProComp, Vonage, Return Path, Global NAPs, BroadVoice, IDT, Telos, Winstar Communications, Association of Local Telecommunications Services (ALTS), Consumer Federation of America and Consumers Union. Lead litigation counsel in several trend-setting antitrust cases arising out of the impact of deregulation in the telecommunications industry.

Two years after CDD & USPIRG warn about online advertising & media consolidation, a call to “monitor the state of competition”

Yesterday, Sen. Herb Kohl, the chair of the Senate Antitrust Committee, sent a letter to the Department of Justice about the proposed Google/Yahoo alliance. Two years ago next month, in its initial complaint filed at the Federal Trade Commission calling for an investigation into behavioral online ad targeting, CDD and USPIRG also petitioned the agency to open up an antitrust investigation. It was clear two years ago–as one surveyed the dizzying global shopping spree by Google, Yahoo, Microsoft, Time Warner/AOL–that a tiny handful would soon dominate the online ad market. Given that online ad revenues are the key to the funding of almost all interactive and online content, we were disturbed by the trend then towards consolidation. Of course, fewer companies controlling all that consumer data also raised fundamental privacy concerns.

Two years later, of course, we have even fewer independent companies left standing. Google swallowed DoubleClick (and is poised to partially operate Yahoo); Yahoo acquired Blue Lithium and Right Media; Microsoft acquired giant aQuantive; Time Warner bought Tacoda and Third Screen Media. Etc.

Regulators on both sides of the Atlantic have been asleep at the digital switch. They have failed to both protect competition and privacy. However, there is a growing awareness that there are serious problems looming. As we know, the same deregulatory philosophy which helped wreck our economy is also the foundation for communications and media policy. It is accompanied, of course, by a `golden’ revolving door between government and private industry that has left consumers and citizens vulnerable to a wholesale set of unfair practices. Addressing these issues will be the focus of much work over the next several years.