"We set the highest standards of privacy and security for our users," Google said in response to the FTC fining Google $22.5 million: for hacking a competitor's system in order to short-circuit a competitor's privacy protection of its users; and for violating the FTC-Google-Buzz enforcement Order without any admission of liability whatsoever. In addition, Google characterized the problem as a minor unintentional technical mistake (like it originally characterized its Street View WiSpy privacy violations), and then patted itself on the back that no personal information was collected by its actions.
Google's public reaction mocks the FTC's mission statement -- "to prevent business practices that are anti-competitive, deceptive, or unfair to consumers" -- which ironically is featured in the FTC's announcement of the Google privacy fine. Google acceded to a small misrepresentation fine for Google, as simply the cost of doing business the Google way.
In addition to admitting no legal liability, Google amazingly did not: apologize to the public; commit to the public to respect and obey FTC enforcement in the future; or publicly accept any responsibility for yet another major management supervision and internal control breakdown.
Even more amazing, the FTC, despite its mission stated above, made no mention that it is: anticompetitive to break into your leading competitor's operating system to disable their consumer privacy and security protections to place an advertising DoubleClick tracking cookie to enhance Google+; and patently fraudulent to trick a competitors operating system with an obviously deceptive page to think that Google's cookie was an approved Apple cookie.
How is it fair to consumers for the dominant Internet player to be absolved of any liability for sabotaging its main competitor or for the FTC to ignore their consumer protection mission by ignoring that there are obviously anticompetitive Google practices beyond Google's misrepresentation? Why did the FTC ignore its mission here? Does the FTC not have enough authority? Is the FTC afraid to prosecute in court for fear of losing? Is Google too politically strong to challenge publicly?
Remarkably, the FTC majority in its statement effectively went out of its way to protect Google's reputation and advocate for Google's interest in arguing strongly against FTC Commissioner J. Thomas Rosch's common sense dissent that no admission of liability when a company is in contempt of an operative FTC enforcement order is not in the public interest.
Even more damning, Commissioner Rosch pointed out that: "condoning a denial of liability in circumstances such as these is unprecedented." Why was the FTC majority so bent on giving Google special "unprecedented" treatment? Did the FTC majority believe Google's track record somehow warranted leniency or yet another chance? Did Google pressure the FTC in any way?
The FTC's history with Google proves the FTC majority should pay heed to passionate commissioner dissents from FTC Google decisions. Ironically, the offending cookie in this Google break-in of Apple's operating system was none other than DoubleClick's omni-tracking cookie.
Remember that the FTC approved the Google-DoubleClick acquisition 4-1 with no conditions, but promised "We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct the Commission intends to act quickly."
In her strong dissent in 2007 that the merger was anticompetitive, then FTC Commissioner Pamela Jones-Harbor warned the majority: "If the Commission closes its investigation at this time without imposing any conditions on the merger, neither the competition nor the privacy interests of consumers will have been adequately addressed." She went on to comment that: "The unique confluence of competition and consumer protection issues should have been a call to action for this agency -- 'the only Federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy."
Since that fateful decision, the FTC has continued to cut Google extraordinary slack, despite the fact that the FTC's approval of Google-DoubleClick was the event that tipped Google to a monopoly. Despite the fact that the Google-Admob merger raised "serious antitrust issues" and was opposed by FT staff investigators, the FTC approved the Google-Admob acquisition in 2010. That decision predictably contributed to Google extending its monopoly to mobile -- Google now has 95% share of the U.S. mobile-ad market per emarketer.
Despite multiple nations around the world sanctioning Google for its Street View WiSpy privacy violations, the FTC quietly closed its Wispy investigation because Google blogged that it would take actions to strengthen its privacy controls. Since the FCC determined that Google misled the FTC and all other privacy authorities about the company's WiSpy liability, the FTC has done nothing. When Google consolidated its privacy policy last winter without a consumer opt-out in apparent violation of the FTC-Google-Buzz enforcement order, much to the consternation of the EU privacy authorities and U.S. State Attorneys General, the FTC strongly defended its prerogatives in investigating Google in Federal Court against an EPIC court case that urged the FTC to fully investigate Google's actions as a violation of the FTC-Google-Buzz enforcement order.
Why has the FTC been so exceptionally tolerant, lenient, appeasing, and helpful to Google, many times over a long period of time, despite its spreading monopolization of markets, and its atrocious privacy record? What influence does Google have at the FTC to enjoy this apparent special treatment?
In sum, the FTC majority said: "this settlement is intended to provide a strong message to Google and other companies under order that their actions will be under close scrutiny and that the Commission will respond to violations quickly and vigorously." Unfortunately the strong message that the full record of FTC enforcement actions against Google over the last five years has sent is that Google has very little to fear from the FTC, because the FTC is unlikely to: disapprove any Google transaction; sue Google in court for privacy or antitrust issues; or require Google to assume any liability or responsibility for its growing rap sheet?
At bottom, if Google can settle all its problems without any admission of wrongdoing, it can continue to deceive users, advertisers and others that Google has no "trust" problems; Google obviously sees settlements as the expedient solution and just the cost of doing business the Google way.
The big unanswered question here is if the FTC in any way has cut short its own antitrust investigation of Google in order to join the EU-Google antitrust settlement negotiations. That would allow Google once again to get away with another big violation of the law without admission of liability or responsibility for its actions, despite being a monopoly that has anti-competitively abused its monopoly power. I hope I am wrong, but to date, Google has played the FTC like a fiddle.
*****
Google Unaccountability Series:
Part 1: "Why FTC's $22.5m Privacy Fine is Faux Accountability"
Part 2: "Google's Culture of Unaccountability: In Their Own Words"
