Privacy

Government scrutiny of Internet platform unaccountability is here to stay because it is a strong bipartisan concern and interest.   

Yesterday’s House Judiciary Committee hearing on “Transparency & Accountability: Examining Google and its Data Collection, Use and Filtering Practices” featured Google CEO Sundar Pichai as the lone witness.

The hearing provided a ~30 congressperson data-set and proxy for where Google specifically, and Internet platforms generally, stand politically at this point in the techlash gauntlet.   

We all have been played.

One of Google, Facebook, and Amazon’s greatest innovations to date may have been deceiving the U.S. government and voters with the narrative that their core Internet business models and practices were only good, innovative, pro-consumer, and worthy of no regulation, when they knew it was untrue, while at the same time lobbying that if an ISP pursued their same Internet business models and practices, that it would be anti-innovation, anti-privacy, and worthy of maximal telephone utility regulation, including a permanent, user-subsidized, price-of-zero for Google, Facebook, and Amazon’s outsized, pure profit,  commercial downstream Internet traffic usage.

Can you say: “winner take all” industrial policy?

Can you say: “regulatory arbitrage” game?

Can you say: “unlevel playing field?”

After this year’s revelations of Google, Facebook, and Amazon’s many bad, unfair, and deceptive practices, it warrants revisiting if their past forceful policy positions that only ISPs are a risk to consumers, privacy, and competition, and only ISPs warrant utility-grade net neutrality, non-discrimination, and maximal privacy regulation, were self-serving, anticompetitive, and deceptive distractions from their own anti-privacy, discriminatory, paid-prioritization practices?

We have all been played like a fiddle.

In this post-mid-term election sea of partisanship, expect a political safe harbor for bipartisanship in the next Congress to protect consumers and level the playing field, by bringing more accountability and transparency to the Internet’s unchecked, winner-take-all, biased-brokers, of online supply and demand: Google, Facebook, and Amazon.

This is timely and relevant because conventional wisdom appears to dismiss bipartisanship in this area as a phase and not lasting to conclude that no Internet-related legislation passes next Congress.

This analysis considers the political reasons why a Republican-controlled Senate and Democrat-controlled House could cooperate and pass bipartisan legislation that brings much more accountability and transparency to the unaccountable Internet triad of Google, Facebook and Amazon.

The Reasons Efforts for More Google Facebook Amazon Accountability Will Remain Bipartisan 

First, there are evident high-level lasting concerns from both the right and left about the Internet triad’s unaccountable power.

Google and Facebook’s cartel dominance of social media, consumer data, digital advertising, and content/news discovery represents a quintessential unlevel playing field in the information/content economy.

The Google+Facebook cartel now controls most mass online info-flows to consumers, without the competitive or public accountability controls other companies face.

However, recent news of Google+ deciding to permanently not compete with Facebook going forward raises an important question:

Is Google+ jumping out of the proverbial privacy frying pan into the Google+Facebook antitrust fire?

SUMMARY:

U.S. antitrust enforcement is evidently undergoing a sea change in how it treats consumer privacy in its antitrust investigations. 

Since the early 2000s through apparently late 2017, DOJ and FTC antitrust enforcers did not consider privacy to be a “non-price factor” in antitrust enforcement.

However, since 2018 the evidence catalogued below indicates that privacy now can, and will increasingly be, a factor in antitrust enforcement involving Internet multi-sided business models going forward, in determining whether a commercial practice anticompetitively harms innovation, choice, or quality.

That’s because of increasingly evident consumer “revealed preferences” for privacy; personal data’s effects on competition for markets; and the inherent “flexibility” of the antitrust consumer welfare standard to adapt to new technological, market, economic, and consumer developments. 

A big reason many investors and the marketplace have concluded that Google and Facebook face no serious antitrust risk going forward was the backward-looking, core conventional-wisdom presumption that harms to consumers’ privacy and data security were largely irrelevant because of the consumer welfare standard focus on price reduction in Internet markets where the “price” is already zero, i.e. free.  

There can’t be a “free exchange of ideas” without transparent competition for the exchange of ideas.

This is a timely point for three reasons.

First, the DOJ announced: “The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies [Google Facebook Twitter] may be hurting competition and intentionally stifling the free exchange of ideas on their platforms." [Bold added.] This “competition” concern ultimately falls in the lap of the DOJ’s Antitrust Division and State Attorneys General.

Just like there is a strong inevitability case that it is a matter of when and not if U.S. online privacy/data protection legislation will pass, there is also a compelling common-sense case why U.S. Federal privacy and data protection legislation should and will effectively preempt or supersede state Internet-related privacy laws.   

California’s June passage of an EU “GDPR-light” privacy bill, has teed up the reality that states can and will fill the vacuum left by Congress’ long inaction in addressing consumer privacy protection in the 21^st century – until Congress legislates.  

The fact that California is taking the lead in filling a Federal vacuum, does not mean that pending state Internet-related privacy laws will survive or be determinative long term when Congress ultimately fills the gaping vacuum.

A Case Study of Alphabet-Google’s 2004-2018 Privacy Track Record of Evident Unfair and Deceptive Over-collection of Consumers’ Personal Data Exposes an Evident Gap in the FTC’s Remedial Authority to Protect Consumers

Submitted as a public comment for the FTC’s fall 2018 “Competition and Consumer Protection in the 21^st Century Hearings.” Topic #5: “The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters” FTC Project Number: P181201; (PDF FTC submission here)

July 30, 2018; By Scott Cleland; President, Precursor® LLC  info@precursor.com & Chairman, NetCompetition®

Conclusion

This case study of Alphabet-Google’s track record of unfair and deceptive privacy and data security practices provides a compelling body of evidence of 17 major business practice examples over a fifteen-year period that indicate the FTC evidently does not have enough remedial enforcement authority to deter Google, or other Internet platforms, from engaging in unfair and deceptive conduct in privacy and data security matters.

It is also evident from Google’s words and actions chronicled below that it legally does not believe its users have a “legitimate expectation of privacy” concerning the information they provide to Google.

It is a matter of when, not if, Congress will pass national privacy and data protection law for the 21^st century.

It’s inevitable, because the U.S. privacy policy to date is operating as predictably as a pendulum swinging. Consider the evident big picture, pendulum dynamic at work here.

Americans want their right to privacy restored.

Prior to 1996, Americans had a well-established, offline right to privacy based on the Fourth Amendment of the U.S. Constitution and several strong federal privacy statutes passed in 1974, 1974, 1978, 1984, 1986, 1988, 1994, and 1996.