The latest Congressional attention of course comes from the latest privacy scandal to hit the Internet. Oh, I’m sorry, I must have channeled my inner sensationalistic blogger for that last line. The only thing that has really happened, at least as Google says it of course, is the consolidation of privacy policies. That idea was enough to get members of Congress to get their hands out of lobbyists pockets and realize that the cameras might be rolling in an election year so they jumped to attention and called Google to protect your interests (wink, wink, nod, nod).

Google responded on their Public Policy Blog

Last week we heard from members of Congress about Google’s plans to update our privacy policies by consolidating them into a single document on March 1. Protecting people’s privacy is something we think about all day across the company, and we welcome discussions about our approach.

We hope this letter, in which we respond to the members’ questions, clears up the confusion about these changes. We’re updating our privacy policies for two reasons:

First, we’re trying to make them simpler and more understandable, which is something that lawmakers and regulators have asked technology companies to do. By folding more than 60 product-specific privacy policies into our main Google one, we’re explaining our privacy commitments to users of those products in 85% fewer words.

Second, we want to make our users’ experience seamless and easy by allowing more sharing of information among products when users are signed into their Google Accounts. In other words, we want to make more of your information available to you when you’re signed into Google services.

Now I will be completely honest here. I have not done a deep dive into these changes and I honestly could give a rip about the supposed injustices Google is perpetrating upon the masses with privacy policy consolidations and Google+ favoring searches. I will leave that for the long-winded to wrestle with over and over and over.

As a rather “normal” user of Google’s services I realize that I can yell, scream, hold my breath, write 2,000+ word rants about things and to what end? None. Why this attitude? It’s because this is a free market and free markets allow for things to happen. Oh and whining is REALLY unbecoming.

OK, class, let’s go over this one again. it looks like everyone needs a refresher. Repeat after me.

• Google is a company, not a government entity
• Google can do whatever it wants to do as long as it breaks no laws (that are real laws not ones that bloggers make up or redefine)
• Most people are not lawyers and wouldn’t know the definition of monopoly or antitrust if came up and kicked them in the shins
• If Google screws up and makes its products worse through its own decisions that is their problem
• If I don’t like what Google does I have options like Bing, Yahoo, Blekko, DuckDuckGo etc etc etc
• Congressmen and women like to see themselves in the news
• Congressmen and women make a lot of money from people who don’t like Google and and from those who do (each side’s money is green so it’s easy to be confused)
• Google, just like IBM and other huge companies before them, will make colossal mistakes that might take the company down. It’s called doing business. They should be allowed to screw themselves up if they see fit.

There’s more but it gets old doesn’t it?

Just to wrap this up Google points out that there are many things that are staying the same. Here is their list. You can choose to believe them or not. Even though everyone who wants to handcuff Google doesn’t get this, it’s still a free country and people are actualy smart enough to make decisions on their own. Oh and if they are fine with the way things are (meaning in many cases they are blissfully unaware) it’s fine too. Anyway ……

Some important things aren’t changing:

We’re still keeping your private information private — we’re not changing the visibility of any information you have stored with Google.

We’re still allowing you to do searches, watch videos on YouTube, get driving directions on Google Maps, and perform other tasks without signing into a Google Account.

We’re still offering you choice and control through privacy tools like Google Dashboard and Ads Preferences Manager that help you understand and manage your data.

We still won’t sell your personal information to advertisers.

We’re still offering data liberation if you’d prefer to close your Google Account and take your data elsewhere.

So lock and load everyone. This is far from over and those with the most at stake (I.e lobbyists, Congress people and Google’s competitors) won’t let this rest.

Good luck doing “clean” business Google. You are definitely going to need it.

From Bloomberg

Companies face fines as high as 2 percent of yearly global sales for losing personal data under an overhaul of European Union privacy rules.

Data protection agencies in the EU’s 27 countries would gain the power to sanction companies that violate requirements for handling personal information proposed by the European Commission today. The measures, which also target online- advertising and social networking sites, update the EU’s 17- year-old data protection policies.

The EU overhaul would also clamp down on data lapses such as Sony Corp. (6758)’s six-day delay in warning customers about a cyber attack that exposed more than 100 million customer accounts, the second-largest online data breach in U.S. history. Industry groups with members including Microsoft Corp. (MSFT) and Google Inc. (GOOG) have warned against overly strict data-privacy rules that may stifle innovation.

At least we found something that Google and Microsoft can agree upon?

Just think about how much harder the EU will start looking for violations especially from companies with giant annual revenue numbers! You don’t think this kind of system isn’t ripe for corruption and misuse? Heck, every system is, so maybe that’s fair either.

Anyway, if you have any business happening within the confines of the European Union you better start studying up. Last thing you need is a bill in the Accounts Payable department that reads “Amount Due – 2% of Annual Sales”.

Image credit – Shutterstock

Critics of the act say that it supports wholesale censorship with no recourse for even accidental offenders. At the root is the concept that the government can block any website that carries pirated materials. Obviously, this would be a big problem for eBay, YouTube, Facebook, pretty much any website that allows users to upload content.

How interesting is it, that those sites aren’t the ones going dark on Wednesday. Wikipedia is leading the charge. The site that is so known for delivering misinformation that teachers have banned it as a cite-able source. Granted, the reliability of the site has improved over the years but it’s still the most plagiarized site for high school papers. Kind of ironic that those students won’t be able to access the site on Wednesday. I can already hear the students begging teachers for an extended deadline on those book reports and term papers.

Then here’s Wikipedia founder Jimmy Wales posting on Twitter:

 ”Student warning! Do your homework early. Wikipedia protesting bad law on Wednesday!#sopa.”

And then, taking advantage of Martin Luther King Day:

And finally, here’s a quote from the Wikipedia release on the topic:

“Today Wikipedians from around the world have spoken about their opposition to this destructive legislation,” said Jimmy Wales, founder of Wikipedia. “This is an extraordinary action for our community to take – and while we regret having to prevent the world from having access to Wikipedia for even a second, we simply cannot ignore the fact that SOPA and PIPA endanger free speech both in the United States and abroad, and set a frightening precedent of Internet censorship for the world.”

It’s all rather theatrical and what’s to be gained? Maybe some people will hit the dark site, understand what’s happening and write their Congressman a letter of complaint. Then what?

How about some answers instead of just saying this won’t work? The White House has already stated that the bill won’t move forward in its current form and DNS blocking is getting taken off the table.

Now, the other side of the coin. From the official White House response:

Washington needs to hear your best ideas about how to clamp down on rogue websites and other criminals who make money off the creative efforts of American artists and rights holders. We should all be committed to working with all interested constituencies to develop new legal tools to protect global intellectual property rights without jeopardizing the openness of the Internet. Our hope is that you will bring enthusiasm and know-how to this important challenge.

The internet is full of smart, creative, innovative people. Surely we can come up with a better way to handle our disagreements than packing up your toys and going home.

According to Bloomberg

Facebook Inc., the world’s most used social-networking service, can be sued by people who claim showing advertisements that their friends apparently like violates a California law regarding commercial endorsements.

U.S. District Judge Lucy Koh in San Jose rejected Facebook’s bid to dismiss the lawsuit on Dec. 16, ruling the plaintiffs may pursue claims that the company’s sponsored ads violate state law and are fraudulent. Koh granted Facebook’s request to dismiss a claim that it unjustly enriched itself with the sponsored ads.

It is obviously Facebook’s desire to take every bit of information they gather from their users and turn it into dollars. Wait, you mean the company’s altruistic PR about connecting the world and making it a better place isn’t the real reason that they do what they do, you ask? No, Virginia, it’s not and Santa isn’t real either. Facebook always tries to come off as the kid who didn’t realize that what they were doing might be wrong. They exemplify the “ask for forgiveness rather than permission” mantra that runs through many Internet players.

The article continues

A sponsored story is a paid ad consisting of another friend’s name and profile picture and claiming the person likes the advertiser. The plaintiffs claim it’s an unauthorized use of their names and likenesses and that they deserve compensation.

The “plaintiffs have articulated a coherent theory of how they were economically injured by the misappropriation of their names, photographs and likeness,” Koh wrote.

How far this ultimately goes is anyone’s guess but it’s always interesting to see just what a court will allow to continue through the process when it comes to issues like this. Of course, it doesn’t hurt that the target is Facebook since many (present company included) don’t buy anything that Facebook hides behind when they try to pry more information from their users. The intent of Facebook is to make as much money off users’ information as possible and to push the limits of privacy (and often good taste) in the process. Beyond that any talk of making the world better is simply pretty words to cover up why Facebook exists.

Facebook claims that they have the right to do what they do which is no surprise

California’s Right of Publicity Statute prohibits the non- consensual use of another person’s name, voice, signature, photograph or likeness for advertising.

Facebook claimed it was immune under the law’s “newsworthiness” exemption, which doesn’t require consent. The plaintiffs are public figures to their friends and expressions of consumer opinion are generally newsworthy, Facebook said.

So according to Facebook I am a “public figure” to my friends? Really? That’s rich.

I’m not a legal eagle by any stretch but this might be worth watching over time because how Facebook is able to define its users is the crux of any position they take on using that users’ data to sell advertising.

So are you a public figure to your friends or are you a private citizen with private friends who like their privacy?

He stated that consumers must be given a choice as to how much of their personal data is tracked, but it’s up to the ad industry, not the government, to make it so.

“We at the FTC have no interest in shutting down the Internet party,” he said. “Our only concern is that, if guests understand there could be a cover charge to the party [in the form of giving up some privacy], they should be able to make meaningful choices about how much they’ll pay.”

This comes just as the Digital Advertising Alliance released an up-dated set of principles regarding online data collection.

The new rules prohibit the use of online data as a means of determining medical care eligibility, credit or insurance eligibility or any employment-related decisions.  It also requires sites to adhere to the Children’s Online Privacy Protection Act rules when collecting data on children under 13 and it requires explicit permission to collect medical or pharmaceutical data.

As much as this is a step in the right direction, privacy advocates fear it’s not enough mostly because Alliance membership is voluntary. If an ad network has no intention of following the rules, they don’t have to join the Alliance. And it’s not like consumers are going to limit their web surfing to sites that use only compliant networks.

Networks that do agree to the rules then break them, could be subject to fines and further investigation by the FTC. The Accountability Program recently released their findings on their first cases. They say all six companies responded in a timely manner, changing their data collection policies within weeks of being notified of a problem.

Liebowitz says that as long as the FTC sees the industry working together to prevent misuse of online data collection, they’ll stay on the sidelines. But if we can’t all play nice, then the government is ready to step in with new rules and laws that will apply to everyone, like it or not.

paidContent reports

Hyperlinking is fundamental to how information spreads on the web—it’s the reason why traffic spikes on some sites and also explains why false information can funnel outward so quickly. One question that publishers and lawyers have long wrestled with is whether sites are legally liable for the accuracy of material they link out to. In a major ruling today, a court offered an answer to that.

Authors should not be held liable for providing links to websites that contain defamatory material, according to the Supreme Court of Canada. The decision is a big win for online publishers. It also marks a shift in how the law weighs competing concerns about reputations and free speech.

Of course, this is one ruling in one country but it could set a precedent for others to follow. It does open the debate a little further though about the spread of material that is not true about a person or organization. This is an ongoing problem in the online world and publishers must always be aware of the potential can of worms they are opening when they link to any material that may be deemed inaccurate.

The ruling comes around a definition of a link that calls it the equivalent of a footnote in traditional written material. This is an interesting view and one that publishers love.

The case of hyperlinks is a challenge for courts because they can be considered as a form or republishing on one hand, or simply as a direction arrow on the other. The court today took the latter view, saying, “Hyperlinks are, in essence, references, which are fundamentally different from other acts of ‘publication’” and that the opposite conclusion “would seriously restrict the flow of information on the internet and, as a result, freedom of expression.”

To be clear this vote by the Canadian Supreme Court was not unanimous and dissenters had their point of view as well.

A minority of the judges thought the new principle went too far. One of these judges, noting that a link can result in a huge spike in the number of people viewing an article, said that links should be considered in the context of how they are presented.

Many of our readers are publishers as well and would probably take the side of the ruling since it gives protections to publishers. My suspicion is that this type of ruling will be looked at closely by many more and not everyone will come to the same conclusions. While most publishers are not out to intentionally slander someone those who don’t have a particularly strong moral compass can run with this one pretty hard.

So do you agree with this decision? What are your thoughts on the responsibility of those providing links to other material?

Image Credit Oleksiy Mark / Shutterstock

Twitter has been trying to trademark the word for a while now but has consistently been blocked by the US Patent and Trademark Office because two other companies had already applied for variations of the term.

Back in September, Twitter filed a lawsuit against Twittad, a company that arranges for people to get paid to Tweet. But instead of a long drawn out battle, it turned into a short fight. Yesterday, the Wall Street Journal reported that the two companies have come to an agreement. Twitter will withdraw their lawsuit and Twittad will give them the trademark on the word “Tweet.”

Though neither party will admit it, we imagine there was a large cash sum that accompanied the offer from Twitter.

With this whole thing sounding as silly as it does we can only imagine what could be next.

Tweety, speaking from his office at Warner Brothers Studios in Burbank, said that he never took it from that puddy tat, and he’s not going to take it from Twitter. He plans to file suit against Twitter, as soon as he’s done raking Angry Birds through the legal coals.

I tawt I taw a chance to fleece someone. I did! I did!

We wish him luck.

The event was a debate and polling before the debate had attendees of the debate set at 61% not feeling that Google has hurt competition.

Those on the other side of the debate? Before it got underway 19% felt that Google was hurting competition and that number lowered slightly to 17% following the exchange.

So what’s this prove? Well, nothing really. Since this group of lawyers is more likely to be from the Silicon Valley region there could be more bias toward protecting one of the biggest players not only in the region but the entire planet.

What it does show, however, is that lawyers have a different view (one that actually is supposed to know the law) vs. the tech press (and press at large) that wants to try any case about Google on emotion rather than law. Right now, emotion is easy to sell. Look a the Occupy Wall Street protests. These people are gathering in some places and not even knowing what their message is. Wow, that’s encouraging.

Now, don’t get me wrong, what happens on Wall Street can be maddening for sure. The trouble is that I don’t have any economic training to fully understand exactly what is wrong other than it manifests itself in greed. Greed is not good for all (although it is ridiculously good for a select few). Sure it can be a bone of contention but unless I have some real knowledge of the real deal I don’t have a real opinion. I am just complaining.

So back to Google. This straw poll is by no means a final judgment on whether Google is or is not too powerful but rather a chance for us commoners to put emotion aside for a second and seek the facts. If Google is found to be guilty of these charges based on the law and facts then so be it. But if they are found not guilty of these charges based on the law and the facts we have to simply let it go and stop complaining.

Why not instead try to use what Google has created to help pull us all out of this economic train wreck. Now wouldn’t that be revolutionary?

Image Credit robodread / Shutterstock

paidContent reports

A federal judge refused late on Friday to grant a temporary restraining order to Timelines.com, a Chicago company that says Facebook’s timeline service may “eliminate” it. In return, Facebook has promised to limit access for now and to hold back on a full launch.

In refusing to grant the temporary restraining order, Judge Edmond Chang noted that Facebook has pledged not to broadly launch the feature before the parties appear in court again on Tuesday.

It seems like more and more the legal obstacles that can be tossed in the way of virtually anything are getting more attention than the change itself. I wonder if there are VC companies out there looking to invest in companies that could be used to get in the way of another’s activities with the payoff for their investment being the winning of a lawsuit?

Timelines.com was looking for a much broader court action rather than what appears to be just a slight delay in the full rollout of the service that Facebook hyped at their f8 conference last month.

In the end though this is likely to mean a settlement of some sort in which Timelines.com will make more money than they would with their site because after going to the site I was left thinking “Man, these guys just stepped in it if they are getting a Facebook pay day”. In other words, I didn’t stay long enough to see just how a site like that would make money but a “Facebook settlement exit strategy” looks like their best option.

Image Credit Carsten Reisinger / Shutterstock

What does happen is that when people start to peel away the onion layers on this one the whole thing starts to stink real bad, real fast. Why? Well, it seems hard to believe that Google would be able to get away with what they did by just paying some cash to make it go away.

Here’s how it played out according to the Wall Street Journal

Google Inc. reached a long-awaited $500 million legal settlement with the U.S. Justice Department to avoid prosecution on charges that it knowingly accepted hundreds of millions of dollars in illegal ads from Canadian online pharmacies.

The ads resulted in the unlawful importation of prescription drugs, including controlled substances, into the U.S., potentially placing consumers at risk, the Justice Department said.

The criminal probe was one of the most serious faced by Google and had the potential to touch executives. If Google had bee prosecuted by the government by knowingly endangering U.S. consumers, it could have tainted the company’s famous credo of “Do No Evil”.

A criminal conviction can also disqualify a company from bidding on government contracts.

First, let’s help the WSJ understand that Google’s credo is not “Do No Evil” it’s “Don’t Be Evil”. Many (including this writer) have been guilty of making the same mistake which makes it appear as if Google is playing to a very high standard. When you look at the idea of “don’t be evil” vs “do no evil” it is much less stringent and has a fair amount of subjectivity built in so it can be maneuvered and massaged depending on the circumstances. In other words, it’s very relative.

It appears that Google knowingly took Adwords payments from these pharmacies for many years. How can that be said? Well, if the article has it right, Google provided support and advice to these online pharmacies to help them with their campaigns and web presence from 2003 to 2009. So for six years Google was unaware that what they were doing was against the law? That’s rich!

Google’s response to the matter was:

“We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

The Department of Justice’s release goes into some detail as to how this all came down including this wonderful anecdote.

The investigation of Google had its origins in a separate, multimillion dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico. While a fugitive, he began to advertise the unlawful sale of drugs through Google’s AdWords program. After being apprehended in Mexico and returned to the United States by the U.S. Secret Service, he began cooperating with law enforcement and provided information about his use of the AdWords program. During the ensuing investigation of Google, the government established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through Google’s AdWords program.

Bitter pill? Maybe so but this kind of business activity isn’t anything that a company with any morals or ethics should be engaging in especially since it was quite obvious that this was on the wrong side of the law.

I wonder which Google employees were complicit in this? I would bet dollars to donuts that there were some sweet commissions paid to salespeople for those ads. Think they are getting hit for their activities?

Whatever the case, Google takes a huge black eye on this one and sets the table for some serious doubt as to just how upstanding they are as a corporate citizen as they are being more heavily scrutinized by federal regulators. All this for some profit? I’ve read somewhere where “Money is the root of all evil”. Actually, that too is an incorrect statement because the actual quote is that “The LOVE of money is the root of all evil”.

Seems to me that Google is having a serious affair with money so yes, logic follows that evil can’t be too far behind.

Your thoughts?

Two congressmen, and possibly several thousand mobile users, want to know more. According to an article in Reuters, House Bi-Partisan Privacy Caucus: Joe Barton from Texas and Edward Markey from Massachusetts have asked Groupon to clarify its data collection and privacy policies. Some of their curiosity stems from Groupon’s recently filed $750 million initial public offering. After that, it’s mostly sheer amazement that Groupon would be so cavalier about wholesale tracking.

Groupon’s general counsel sent a letter to Congress explaining the thought process. In it, he says that right now they can only track users if they have the mobile app open at the time, but they’re hoping to change that very soon.

“In order to choose a relevant deal for the user at the correct time, location information would need to be collected about the user just before noon, even if the Groupon mobile application is not running on the device at that time. We are working to provide this type of functionality in the future.”

Groupon’s defense is that they’re only giving customers what they want, and people do have a right to opt-out if they don’t want to be tracked. AllThingsDigital has a graphic for that.

In the global scheme of things, there are bigger problems in the world. I appreciate that these congressmen are trying to protect us, but I’d rather see them spend their time on truly fraudulent scammers who rob innocent people of their hard earned cash.

Groupon is giving people what they want, a faster, easier way to save a buck. If people don’t read the fine print or simply think through how the information got to them, that’s not Groupon’s fault. I’m an intelligent human being and when I visit an online store and an hour later I see an ad for that same store on a different website, I know it’s no coincidence. I don’t need an act of Congress to save me from my obsessive shopping self. That’s a demon I must deal with on my own.

Go ahead, Groupon. Track me. If it means a Buy One Get One lunch deal where I’m standing, I’m all for it. Are you?

I portrayed one scenario where things would escalate enough that the POTUS would have to take action….take over Twitter. Well, it appears the UK government is pondering something similar, in light of the riots in England.

According to TNW, UK Prime Minister David Cameron said in a statement:

“Mr Speaker, everyone watching these horrific actions will be stuck by how they were organised via social media.  Free flow of information can be used for good. But it can also be used for ill. And when people are using social media for violence we need to stop them. So we are working with the Police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality.”

Shortly afterwards, the UK’s Home Secretary announced she would be meeting with Facebook, Twitter and the makers of the Blackberry.

Scary huh? No, not the riots. Those aren’t scary, those are a down right disgrace. No excuses, right?

Well, it seems like our western governments seem to turn a blind eye, when social media is used to create unrest in the Middle East. Heck, there are rumors that those talks with social networks are more of the encouraging kind.

Is there a double standard? When does the use of social media switch from “fueling democracy” to “fueling riots?”

This post could get ugly, so I’m going to stop now, with a question.

Do we want to live in a world where Big Brother has the power to stop our use of social media?

Maybe Google’s SVP and Chief Legal Officer David Drummond should have done a little more homework before he accused some big names of playing patent pranks on the search company. Here’s the gist of his claim from the Google blog

But Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.

They’re doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel’s old patents (the “Rockstar” group including Microsoft and Apple), to make sure Google didn’t get them; seeking $15 licensing fees for every Android device; attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Phone 7; and even suing Barnes & Noble, HTC, Motorola, and Samsung. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it.

OK, so Google feels like it’s getting unfairly beat up in this process. It’s not like they don’t play this game themselves with the recent purchase of patents from IBM. Drummond’s claim, however, goes into an area where he says the competition has done some shady stuff which will result in some regulatory scrutiny.

This anti-competitive strategy is also escalating the cost of patents way beyond what they’re really worth. The winning $4.5 billion for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion. Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means — which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.

So Google cries foul. Why not I suppose? Everyone seems to be taking shots at them these days.

Trouble is that the following salvo has been fired back by Microsoft. Rather than go the full blown blog post route, however, Microsoft decided to microblog instead. The following two tweets show just how powerful 140 characters or less can be. Or, in other words, speak softly and carry a big tweet.

First from Microsoft’s general counsel, Brad Smith.

Next from Frank X. Shaw who leads corporate communications for Microsoft

The URL in that tweet is an e-mail from Kent Walker, Google’s very own SVP and general counsel. It’s a bit hard to read but it essentially tells the story that Google turned down the opportunity to bid jointly with Microsoft.

Now, to be fair, the e-mail doesn’t mention the Novell patents so, in fine lawyer fashion, Walker said something without saying something. Gotta figure though that Smith and Shaw checked in with each other and decided they could throw a haymaker at Google on this one.

So what’s the net / net here? Google looks whiny and ill prepared. Microsoft, Apple and Oracle look like they are doing what others do in business but could very well feel the sting of a regulatory investigation into anti-competitive claims. In this current political environment it looks like no one is safe from that possibility at any time for any reason.

In the court of public opinion, however, it looks like Google is out in the cold here. If you were asked to go play with someone, say no to the offer, then complain that the someone still played without you, you look bad.

Oh and the extra cost of each Android device? Why don’t you just eat it Google? You have the cash.

The WSJ reports:

The U.S. Federal Trade Commission is poised to serve Google Inc. with civil subpoenas, according to people familiar with the matter, signaling the start of a wide-ranging, formal antitrust investigation into whether the search giant has abused its dominance on the Web.

The five-member panel is preparing within days to send Google the formal demands for information, the people said. Other companies also are likely receive official requests for information about their dealings with Google at a later stage, the people said.

Representatives for both Google and the FTC declined to comment.

From Google’s perspective, the FTC’s embryonic antitrust probe is the most serious to date in the U.S. Although Google has faced numerous antitrust investigations in recent years, at least in the U.S., federal inquiries have so far largely been limited to reviews of its mergers and acquisitions.

Maybe this is an extension of the more heated scrutiny that the company has received by the European Commission in the past year. Since no one is saying anything beyond this report it’s pretty hard to tell. I am awaiting some word from Google but I am not holding my breath about details.

The article goes on to tell that this could be a serious deal.

The new FTC investigation, by contrast, will examine fundamental issues relating to Google’s core search-advertising business, which still accounts for the majority of its revenue. Those issues include whether Google—which accounts for around two-thirds of Internet searches in the U.S. and more abroad—unfairly channels users to its own growing network of services at the expense of rivals’.

Sounds an awful lot like the allegation from across the pond. Politically this is a ticking time bomb since Google was solidly behind the election of President Obama and there are many ex-Googlers in the administration.

That said, the president is having a very difficult time right now with his popularity at an all time low and the bulk of that is due to the economy in the states, which despite what the press says at times, is still pretty much in the crapper.

In reality this could all be much ado about nothing since, as the WSJ states, monopolies themselves aren’t illegal but rather the abuse of that position is. Now if that doesn’t seem subjective I don’t know what does but it’s how it works.

It’s also anticipated that this probe could take well over a year to complete and could end up with no charges being filed against the search giant. In other words, it’s too early to tell.

But let’s not let that kind of reality keep us from jabbering on about may or may not happen. Please, not that. Heck, with the election cycle speeding up much more rapidly than any economic recovery there needs to be something going on that looks like progress. Maybe this administration thinks that biting a rather large hand that feeds the economy (despite all the drags on it elsewhere) and could be argued to have kept the US out of an even more severe situation, is a good idea.

Who knows? One thing is for certain. No matter where this lands Google does not want to be in the crosshairs of the FTC. No one does.

Image via Shutterstock

Now, some states are saying that having affiliates in a state, is equal to having a physical presence. One by one, states have been enacting this new law and one by one, Amazon has been canceling affiliate deals with people in those states.

It looks like my state, California, is next. Today, I got an email stating that the California Assembly is going to vote on such a measure next week. Those opposing the bill say over 25,000 business in the state will be affected and it won’t result in more revenue for California because those companies will simply cease doing business here rather than pay up. Now, I don’t make a lot of money from affiliate programs, but I make enough that I’d miss it if I lost this revenue stream. I’m not any happier about it than Jeff Bezos.

Bezos is now taking a stand with the concept that this whole process is unconstitutional if it happens without Congressional approval. He was quoted as saying,

And in the U.S., the Constitution prohibits states from interfering in interstate commerce. And there was a Supreme Court case decades ago that clarified that businesses — it was mail-order at that time because the Internet did not exist — that mail-order companies could not be required to collect sales tax in states where they didn’t have what’s called “nexus.”

Amazon isn’t objecting to the concept of sales tax, though there are plenty of people who think the whole concept should be abolished. What he, and other online businesses are objecting to, is having to collect sales tax based on the wide variety of laws that are particular to each state.

The solution, would be for the Federal Government to enact an internet sales tax that would cover all of the 50 states. The objection here is that sales tax is designed to help pay for the infrastructure of a local area, which a company like Amazon wouldn’t be using in the first place.

The problem is the fact that the laws haven’t caught up with the internet and we’ve seen this in other areas, not just sales tax. Our founding fathers were forward-thinking guys, but I’m sure they never even dreamed of a time where we would be selling items through digital space. Let alone mailing those items to states that were nothing but dangerous, uncharted territories at the time.

The internet may be new, but it’s not that new. Certainly it’s been around long enough for the government to realize that changes need to be made. Local may be all the rage in marketing, but when it comes to laws regarding internet businesses, we’ve got to start thinking global.

How do you feel about a standardized Federal sales tax?

Despite the feigned empathy towards those that are worried about the sharing of sensitive personal information, Facebook leads a group–which includes Google, Twitter and Zynga–in opposing proposed legislation in California that would make it mandatory for social networks to shore up their privacy settings.

If it passes, the law would require social networks to make all information private by default, unless the user chooses to go through each setting and remove any privacy. Clearly this is a smart idea for the user, as it would let them decide which sensitive information is shared publicly. You would also think that this would take the heat off of the social networking sites, as they would no longer get complaints that their privacy settings where too, well, non-existent.

But sadly no.

There’s money to be made and it’s not going to happen if you prevent all of your telephone, email, friend, and hobby information sit behind your privacy settings. So, in the interests of making money improving your social networking experience, these companies are opposing the bill on the grounds that:

• Asking users to make privacy choices at the outset–the group calls this “privacy shrink wrap”–will result in bad and overly broad decisions. The Federal Trade Commission recently said that it’s best practice to ask users to make privacy decisions on an item-by-item basis so they can understand the context.
• Users are already setting their privacy settings themselves, and don’t seem to have had problems with social networks failing to remove content after it’s been requested.
• Many social networking companies are based in California, and implementing these practices would significantly impact their businesses at a time when the state’s economy is in shambles.
• SB 242 is unconstitutional because it interferes with freedom of speech and interstate commerce. Quote: “By hiding from view of all existing usersʼ information until they made a contrary choice, the State of California would be significantly limiting those usersʼ ability to ‘freely speak, write and publish his or her sentiments on all subjects.’”

Do any of the above reasons wash with you? I’m not saying that it’s necessarily a good thing for new accounts to be private by default, but I also don’t like these companies hiding their real motives behind some feigned altruism.

Thoughts?

A group who was trying to ding Facebook on privacy found that the pot at the end of the rainbow was empty for now as their case in a California court was tossed but still allowed to return if there is actually anything to it.

The Register reports

A federal judge has gutted a lawsuit filed against Facebook for allegedly leaking users’ personal information to advertisers on the grounds that they didn’t suffer specific injuries and the leak didn’t run afoul of wiretap and computer fraud statutes.

The lawsuit, filed in federal Court in San Jose, California, last year, alleges that the social network violated its own privacy policy by including users’ ID numbers in referrer headers that were created each time they clicked on an ads. Two California men alleged that the disclosure, which spanned a three-month period earlier that year, shared their personally identifiable information with advertisers. They sued for violations of the Electronic Communications Privacy Act, federal wiretap statutes, breach of contract, and other laws.

Oh well, looks like these Winklevoss wannabes will have to go back to the legal drawing board to hit the Facebook Lotto.

It’s an interesting ruling in that it falls under the “no harm, no foul” banner of how the Internet and privacy may play out in the courts. That’s an interesting take because it’s like only admitting something exists if something bad happens.

I see this in the same vein as the dangerous intersection in town that has been the site of many accidents and it’s a known hazard but the government won’t install a traffic light until a few people are killed as a result of the situation. Makes sense on some level except for the one that includes common sense.

Of course, having your information handed over to advertisers usually won’t result in death so maybe the courts are going to side with Facebook for a while. What’s the worst thing that can happen? Identity theft that ruins someone life and makes it a living hell on earth? Stop complaining! It’s just your privacy!

For now though it looks like Facebook and other online gatherers of data are on a roll since this is not the first ruling that feels that an ounce of prevention comes nowhere near the value of a ultimately applying a pound of cure.

The ruling is only the latest time a lawsuit brought for alleged privacy breaches has been dismissed because the plaintiffs didn’t allege a specific injury. In late 2009, a federal judge threw out claims brought against Express Scripts for a lapse that exposed customers’ names, dates of birth, social security numbers, and prescription drug histories. Last year, the Ninth US Circuit Court of Appeals absolved clothing retailer The Gap for exposing sensitive information for 800,000 customers when laptops with unencrypted contents were stolen.

Personally, I will error on the side of caution. The more I learn about how sloppy Facebook is with any data the less I am willing to hand it over to Zuck and company.

What about you?

Even though they do say “advertorial” on them and they are found in sidebars where banner ads usually hang out, people still think they’re legitimate news sources, so they click and they buy the diet product that is hawked at the end of it all. The FTC says no more. They’ve gone to court to stop ten companies who produce these phony ads and they want to force them refund the money to consumers who fell for the claims.

The FTC charges that the defendants:

• make false and unsupported claims that acai berry supplements will cause rapid and substantial weight loss;
• deceptively represent that:
  • their websites are objective news reports;
  • independent tests demonstrate the effectiveness of the product, and
  • comments following the “articles” on their websites reflect the views of independent consumers; and
• fail to disclose their financial relationships to the merchants selling the products.

The combination is pretty damning, but what if you separated these claims? Would it be alright to create a phony news site complete with fake comments if the facts were true? Couldn’t that just be seen as creative license?

The FTC is also going after them for not disclosing the fact that it’s an affiliate deal.

“The defendants receive commissions when consumers buy the products or sign up for “free trials” on the product-selling sites – but they fail to adequately disclose their lack of objectivity and their financial incentive to get consumers to buy the products.

In total, it all falls under the heading of deceptive advertising and I get that. But you do have to wonder how so many people can be taken in by what is so blatantly an advertisement. According to the FTC, the companies involved have paid out more than $10 million to run these ads, so it’s likely that they’re pocketing a lot more.

Apparently, many people do believe everything they read on the internet.

Normally, this kind of case would be viewed as a get rich quick play by most because there are more than a few large question marks in the claims of a web developer in upstate, New York. He has already taken one swipe at claiming that an amended contract from 2004 between he and Facebook founder Mark Zuckerberg entitles him to some serious cash.

The Wall Street Journal reports

The strange fight over the origins of Facebook Inc. has new lawyers, new allegations—and possibly new legs.

Paul Ceglia, who last year surprised Silicon Valley by claiming he was entitled to a large stake in the social-networking company, filed an amended complaint citing emails he says support his claims against Mark Zuckerberg, Facebook’s founder and chief executive.

Mr. Ceglia, who lives in Wellsville, N.Y., has hired DLA Piper, one of the world’s largest law firms, to represent him in the case he filed in U.S. District Court for the Western District of New York. He also has added Dennis Vacco, a former New York attorney general, as co-counsel.

The suit claims a 2003 contract between Mr. Ceglia and Mr. Zuckerberg entitles Mr. Ceglia to 50% of the founder’s equity from when he started the company in 2004.

Why are we giving this any attention? It’s mainly because the law firm that has been retained by Mr. Ceglia is big. Real big. Most big firms don’t do a lot of ambulance chasing and high risk cases because they have the resources to weed out who has a case and who doesn’t before they decide to take on a client. Like any big firm they want to feel like there is a real chance of ‘winning’ (which may be just a large out of court settlement rather than a trial and verdict but it’s the money that matters, not the truth, right?) before they invest time and resources in pursuing a case.

What makes this interesting is the intrigue around just how Facebook started and it dredges up all of the questionable characteristics of none other than the social media wonderkind himself, Mark Zuckerberg. Of course, let’s not ignore that Mr. Ceglia has had his own legal issues and there are likely to be countless questions about his character. My guess is that the lawyers think they know about him enough to make something fly.

Zuckerberg has been viewed from both ends of the spectrum. Depending on who you speak to he can be a man of very questionable character or he can be Time’s Man of the Year. He can be portrayed as the starter of revolutions or the man who stole the idea of Facebook. He can be the sweating, uncomfortable kid on stage trying to talk about his service or the new, improved and slicker Zuck.

So what’s going to happen with this lawsuit? It’ll be fodder for many continue to dig into Zuckerberg’s past and that never seems to come up with nice things about him and his character. I have never personally met the man and it is very likely I never will, so any assumptions I make (along with just about anyone else) about him will come from the court of public opinion. That’s a court that no one wants to be tried in because, let’s face it, no one is even close to perfect yet most people like to judge.

The lawsuit and the outcome will almost be secondary unless of course, Mr. Ceglia’s attorneys somehow convince someone that he really is entitled to half of Facebook based on a claim he sat on for over 6 years because he says he had forgotten about it. That alone is sketchy. But hey, stranger things have happened and if Zuckerberg suddenly became 50% poorer that would be something of interest.

In the end though, the big loser in all of this is likely to be Zuckerberg because the more that is revealed about who he is and how he handles business dealings the more suspect he becomes. I have always believed that culture in a company comes from the top down so the darker the image that is painted of Zuckerberg it’s natural to believe that Facebook is operating like he does in general. Look at how Facebook has approached privacy. It’s always been a “let’s ask for forgiveness rather than permission” approach which is the same as saying “let’s see what we can get away with”.

Maybe Zuckerberg’s tendency to try to get away with things will come back to bite him. Who knows? Honestly, whether the case is won, lost or dismissed is irrelevant because what’s really on trial is Mark Zuckerberg’s character or lack thereof. That’s what will likely be with him forever in the digital world he helped to create that can never forget and often chooses not to forgive.

ZDNet UK reports

Google has lost a case in Italy over the defamatory nature of autocomplete suggestions, according to a lawyer for the complainant.
On Tuesday, lead counsel Carlo Piana wrote on his blog that the Court of Milan has upheld its earlier decision to order Google to filter out libellous search suggestions. These are the suggestions that pop up in Google’s search input bar, proposing what the user might be wanting to search for.

People searching via Google for Piana’s client, who remains publicly unnamed, were apparently presented with autocomplete suggestions including truffatore (“con man”) and truffa (“fraud”).

No that I am upset for Google. This kind of activity is just part of playing the game at the scale which they do.

As for the actual ruling? It’s difficult to justify based on censorship and free speech but there is also plenty of room for discussion. As a searcher I would want to be warned of any wrong doing that the party I am researching has been up to. As a person in the Internet age though, I am well aware of the ability of Internet savvy people to smear someone’s name in the SERP’s. There is also the trouble of guilt by association if someone is searching for a person or business with a common name and they see negative results that may have nothing to do with the searcher’s actual target.

Unfortunately, the Internet is far from perfect and cases like this show how these imperfections play out in various countries and cultures. It’s a variable that marketers have to be aware of for their own efforts as well.

The article continued

Google lost its bid to claim the protection of the E-Commerce Directive’s safe harbour provisions, which partly shields hosting and ISPs from liability for content held on or transmitted over their systems. However, the court viewed the autocomplete suggestions as being produced by Google itself.

“Google argued that it could not be held liable because it is a hosting provider, but we showed that this is content produced by them (and by the way, they do filter out certain content, including terms that are known to be used to distribute copyright-infringing material), although through automated means,” Piana wrote.

The lawyer said the suit is “by no means an endorsement to censorship”, as the allegations had been fully discussed with Google before the court action was even considered and only two phrases were put forward to be filtered out of autocomplete.

Apparently, the unnamed ‘victim’ was in the world of finance so I immediately received a much clearer vision of what might be happening here. Hmmmm, finances, claims of fraud and cons. Seems to fit. While that is terribly stereotyped it is good to know that this is something that happened in an industry where that claim is much more common and can be made loudly online (and is very often).

So how did Google respond to the verdict?

“We believe that Google should not be held liable for terms that appear in autocomplete as these are predicted by computer algorithms based on searches from previous users, not by Google itself,” the company said. “We are currently reviewing our options.”

I found that response pretty curious because it seems like Google is talking out of both sides of its servers. That statement acts as if an algorithm is some separate entity that does its own thing. Didn’t someone (as in a Google employee) program that algorithm to do what it does? This is the kind of creepy talk that Google needs to avoid at all costs because the more they advance with technology and engineering the less human they sound.

Go to the light. Enter the Goog. We’ll take care of everything for you (cue the evil laugh and maniacal rubbing together of hands).