March 26-April 1: It's all about... Google?
March 26-April 1: It's all about... Google?
Yes, sure, the combination of AT&T and T-Mobile continues to grab the most headlines (you can see all the coverage). But there were a few additional policy developments in the last week and the common actor in each seems to be search giant Google.
Google tops paidContent.org's recently released list of the "Most Successful Digital Media Companies in the US" -- that is, the companies bringing in the most money from online content and online advertising. paidContent estimates that Google reaped $14.1 billion in digital revenue in 2010. The company has created a massive business off of others that do create content online. Its search engine culls billions of web pages to return results, which it then sells ads against. Google's AdSense is the largest ad network in the world and funds the operations of thousands of sites. And Google's YouTube hosts videos that are played more than two billion times a day.
And Google is only growing. It gave all of its 24,000 employees a 10% raise this year. And it announced in January that 2011 would be its biggest hiring year ever. How many hires will that mean? Its previous biggest hiring year was 2007, when it added nearly 6,200 people around the globe. YouTube also said it would increase hiring more than 30%.
Google just announced that it will build its ultra high-speed network in Kansas City, Kansas. Next year the proposed network will bring homes and offices gigabit-speed data -- about 100 times faster than most Americans now have. Google said it will invest tens of millions of dollars in the system. It will use existing utility poles and underground conduit to deploy fiber for the system. Schools and other public locations will be able to use the service for free.
But the company has also had a number of setbacks of late.
On March 22, US Circuit Judge Denny Chin has rejected a deal between Google and lawyers for authors and publishers to let the gigantic search engine make money presiding over the world's largest digital library, saying the creation of a universal library would benefit many but would "simply go too far" by "grant[ing] Google significant rights to exploit entire books, without permission of the copyright owners." Judge Chin said the deal gives Goggle "a significant advantage over competitors." He said the deal would be "rewarding [Google] for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case." The deal's collapse have some wondering what Google's next move will be to make its Google Books project a reality. Some, like the New York Times, are looking to Congress for a solution. Congress could resolve the problem of orphan books. In 2008, it almost passed a bill that would allow anybody to digitize orphan works without fear of being sued for copyright infringement as long as they proved that they had tried to find the rights’ holder. This would give all comers similar legal protection to that which Google got in its agreement.
On March 30, Google got more bad press when the Federal Trade Commission announced the company had agreed to settle charges that it used deceptive tactics and violated its own privacy promises to consumers when it launched its social network, Google Buzz, in 2010. The agency alleges the practices violate the FTC Act. The proposed settlement:
- bars the company from future privacy misrepresentations,
- requires it to implement a comprehensive privacy program,
- requires the company to obtain users’ consent before sharing their information with third parties if Google changes its products or services in a way that results in information sharing that is contrary to any privacy promises made when the user’s information was collected,
- calls for regular, independent privacy audits for the next 20 years to assess its privacy and data protection practices.
This is the first time an FTC settlement order has required a company to implement a comprehensive privacy program to protect the privacy of consumers’ information. In addition, this is the first time the FTC has alleged violations of the substantive privacy requirements of the U.S.-EU Safe Harbor Framework, which provides a method for U.S. companies to transfer personal data lawfully from the European Union to the United States.
The action is part of the FTC's stepped-up efforts to protect consumer privacy . FTC's Maneesha Mithal, director of the division of privacy and identity presentation, said this week that the FTC is concerned when companies don't keep users' data secure -- as happened when Twitter security glitches resulted in hackers gaining access to some users' names, passwords and private messages. The agency recently finalized a settlement with Twitter stemming from that data breach. Mithal also said that failing to live up to promises in privacy policies can trigger FTC action. The agency recently settled with ad network Chitika for telling users they could click on a link to opt out of online behavioral targeting, but then setting those opt-outs to expire after only 10 days.
Privacy is one of the few issues in Washington that is inspiring bipartisanship. In the Senate, Communications Subcommittee Chairman John Kerry (D-MA) is meeting with Sen John McCain (R-AZ) in hopes of finally bringing him on board as the lead GOP co-sponsor of a privacy bill. On the other side of the Capitol, Rep Cliff Stearns (R-FL) said that he is seeking a Democratic co-sponsor for legislation he plans to offer soon.
Google's most recent headache came March 31 with an announcement from Microsoft that is filing a formal antitrust complaint with European Union officials. Microsoft has six complaints:
- Google's ownership of YouTube has disadvantaged Microsoft in the realm of video search,
- Google has prevented Microsoft phones from running YouTube properly,
- the Google Books settlement has threatened to lock out competitors,
- Google's ad services have prohibited advertisers from porting collected user data elsewhere, such as to Microsoft's tools,
- Google has blocked competing search boxes in part through exclusivity deals, and
- Google "discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements."
FTC Commissioner J. Thomas Rosch also raised concerns recently that the four major Web platforms -- Google, Facebook, Apple and Microsoft -- could skew the Internet advertising market to the detriment of competitors and potential upstarts.
"We have to be careful about letting the current players manipulate the market in such a way that it does tip prematurely [in their favor] and that it hurts rivals," Commissioner Rosch. "Google is trying to do it though its search methods. Facebook is trying to do it though its huge population of friends. Apple's trying to do it though its app stores. Microsoft is trying to do it through its alliance with Facebook," Commissioner Rosch said. "This is a pretty highly concentrated market, as far as I'm concerned."
Headlines staff are off on Spring Break next week and, we admit -- the timing is terrible. The Senate Commerce Committee is looking at the communications needs of Native Nations, the FCC revs up intercarrier compensation reform and holds a monthly meeting with a packed agenda , the Senate Judiciary Committee consider updating privacy laws for the digital age -- and, of course, there's a host of events in Boston around the National Conference for Media Reform. Here's the full agenda, we'll play catch-up when we return April 11.
Happy April Fool's Day!