Conflict of Interest

The proposed FTC-Google privacy settlement of EPIC's privacy complaint has many important, surprising, and far-reaching implications.

• (FYI: FTC Release, FTC Complaint, proposed Consent Order, Rosch concurrence, Google statement.)

I applaud the FTC for taking Google's privacy misrepresentations and deceptions so seriously and look forward to the FTC rigorously enforcing this landmark consent order.

Summary of Takeaways:

Three completely different entities, coming from three very different perspectives/motivations, are all making the same charge against Google: that Google forged their work and stole/misused their property in creating its world-leading Android mobile operating system.

Popular bipartisan interest in safeguarding consumers privacy in the U.S. and Europe confronts Google with a core strategic problem because Google's targeted advertising business model is no "privacy by design" and no "privacy by default."

• Google bet wrong and big in assuming that since technology made it so much easier to track and profile users for targeted advertising, users would just accept the new loss of privacy and users and governments would never enforce user demand for choice to protect their privacy.
• Google's all-in company bet on openness, transparency, and sharing, was also a strategic bet against robust privacy, security, and property protections.
• In choosing to brand itself as the penultimate "White Hat" player promoting "openness," Google has effectively designed its business, architecture, and brand to be the main "Black Hat" player on privacy.

Google's No Privacy By Design model is unique.

It will be surprising if the Republican FCC Commissioners and a bipartisan majority of Congress do not oppose the FCC's unwarranted war on wireless competition policy.

• The FCC appears to be itching to start another political battle over competition policy with its upcoming fifteenth wireless competition report to Congress, by making another political decision devoid of supporting evidence or merit, that the wireless market does not have "effective competition."
  • Such a fantastical political finding, helps the FCC to ignore Congress and the law yet again, and also to unilaterally impose new sweeping economic regulations on wireless, including net neutrality.

The linchpin of the FCC's de-competition policy to restore the FCC to its pre-1996 monopoly regulation glory days, and to put the FCC in more control of the communications sector going forward, is to politically define away the existence of "effective competition," in order to justify FCC regulation of the mobile Internet.

Google's imaginary spokesmodel Brandi Sparkles explained the logic and thinking behind Google considering branding its new Social media effort and "Facebook Killer" service -- "Circles" -- in the following statement.

"After analyzing everything that everyone has ever said privately or publicly about the word "circles" in digital recorded history, Google's skynet computer decided that Google should name its secret "Facebook-killer" social media service -- drum roll please -- "Circles!!!" (Cue: The digital crowd and the media Googlerati should now roar with approval and delirium at witnessing branding perfection by artificial intelligence. Pretty cool! Pretty cool!)

Google's skynet computer liked the many connotations that spring to mind when one hears the words: "Google Circles."

Google's deep aversion to securing the permission of others before doing something that affects them is central to Google's famed "innovation without permission" ethos. Sadly, it is also the wellspring of Google's infamous privacy and security problems.

Where does Google's deep aversion to permission come from? From Google's founders, Larry Page and Sergey Brin, according to their mentor Terry Winograd, in Ken Auletta's book "Googled."

• "Winograd describes his former students as impatient: 'Larry and Sergey believe if you try and get everybody on board, it will prevent things from happening. If you just do it, others will come around to realize they were attached to the old ways that were not as good.' The attitude, he said 'is a form of arrogance.'"

This week we witnessed the latest high profile example of Google's deep aversion to getting the permission of others.

A few days ago, Google announced that it remotely disabled malware-infected Android applications without the permission of 260,000 Android users who bought or downloaded infected applications from Google's app store.

Brandy Sparkles, Google's roving PR crisis manager parachuted into London last night to snuff out any dissent or questions about Google's purchase of BeatThatQuote.com, a UK price comparison site Google is buying for a reported $37m.

• Google's Brandy Sparkles, known in Google circles as the "Red Adair" of corporate PR crisis management, was called in to snuff out coverage of an impertinent, "little" SEO Book blogpost:  "Google buys BeatThatQuote, A UK comparison site violating Google's rules."
• That post chronicles how Google bought a site that employs lots of the "low quality" "cheating" SEO tactics that Google ruled are unacceptable SEO practices just last month.

After sizing up the SEOBook's charge that Google was being hypocritical in not following its own rules, Brandy Sparkles released the following statement:

"We are the Goog. We make the rules for others on the Internet and we can change them any time we want. That's the way this world works. Life is not fair and Google does not try to be.

In a fit of hypocrisy and total lack of self awareness, the New York Times ran an editorial today that criticized the fairness and appropriateness of the very Internet business model, a "walled garden," that the New York Times is adopting "very shortly" in order to survive.

• Today, the New York Times editorial board expressed support for the FCC's net neutrality economic regulations, and against "a walled garden somewhat like cable TV, where providers can decide what we can see, and at what price."
• Last week, Bloomberg reported that the Chairman and Publisher of the New York Times, Arthur O. Sulzberger Jr., said: the NY Times would "start charging readers for online access 'very shortly.'''
  • Mr. Sulzberger went on to say: "We can no longer afford to have iPhone and iPad apps for free..."

Simply, the New York Times hypocritical editorial position is that the New York Times Co., which owns newspaper and broadcast distribution infrastructure, has the business freedom to erect pay walls and adopt a walled garden business model in order to earn a profit off their property and to fund their expensive business infrastructure, but competitive broadband providers should be banned by the FCC from having the same business freedom as the New York Times.

Google's biggest-ever reordering of its search results this past week to reward what Google believes is high quality content and punish low quality content prompted an public epiphany this week that Google has the market power to effectively pick winners and losers in the online content market.

• See WSJ's "Google Reorders Web Winners," "Google Search Cleanup Has Big Impact; see AP's "Google Tries to Bury Low Quality with Major Search Algorithm Changes;" and WebProNews' "Google Update Costs Mahalo Employees Their Jobs."

There are two big takeaways from this public epiphany that "Google is the de facto web content market:"

• First, Google's "algorithmic hand" largely has supplanted Adam Smith's "invisible hand" market mechanism to pick web content winners and losers; and
• Second, Google has proven to be a highly unstable, unpredictable and capricious economic platform/mechanism for online content entrepreneurs and businesses to try and build a successful and sustainable business on top of.

Media and antitrust scrutiny of Google's public representations -- that its search rankings are unbiased and objective -- will increase greatly for two reasons:

• First, Google's search dominance does make Google the Internet's content "kingmaker" and it does empower Google to de facto pick winners and losers on the Internet just by subjectively adjusting its ranking algorithm; and
• Second, the more people look into Google's search ranking algorithm, the more obvious it becomes that it is highly subjective, and not objective and unbiased as Google represents.

As the glare of public and investigative scrutiny focuses on Google's "black box" search ranking algorithm, its mystery and mystique fade away, because people come to understand that a search algorithm is just mass automation of the application of subjective variables/biases, subjective judgements of "quality" content and "quality links," subjective judgements of intent, and subjective human ratings of websites and content.