Tag: FTC

Google’s paltry FTC Fine is a joke

Seth Anderson1 Comment

Nickles Not Pickles
Nickels Not Pickles

You might have heard that Google engineers created a way to surreptitiously collect data on all Safari users – including all iPad, iPhone and iPod Touch users – ignoring the privacy settings. As a result of a computer scientist by the name of Jonathan Mayer, his investigation, and a subsequent media uproar, the FTC got involved, and eventually fined Google a few nickels.

The Federal Trade Commission fined Google $22.5 million on Thursday to settle charges that it had bypassed privacy settings in Apple’s Safari browser to be able to track users of the browser and show them advertisements, and violated an earlier privacy settlement with the agency.

The fine is the largest civil penalty ever levied by the commission, which has been cracking down on tech companies for privacy violations and is also investigating Google for antitrust violations.

“The social contract has to be that if you’re going to hold on to people’s most private data, you have to do a better job of honoring your privacy commitments,” said David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, in a call with reporters. “And if there’s a message the commission is trying to send today, it’s that.”

The commission said Google had broken the terms of a 2011 settlement over privacy missteps related to the Buzz, a social networking tool now defunct.

(click here to continue reading F.T.C. Fines Google $22.5 Million for Safari Privacy Violations – NYTimes.com.)

 And I say nickels, because, to quote an earlier blog post:

The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated

(click here to continue reading FTC Should Pursue Case Against Google at B12 Solipsism.)

Ride Smarter
Ride Smarter

Let’s do the math, as best we can on this convenient envelope on my desk. Google broke their agreement for about a year.1 Even if there was only one violation per day, this adds up to $5,840,000 in fines. But there are probably 200,000,000 iOS devices in active use2, plus desktop Macs running Safari, so potentially, Google was liable for 200,000,000 x 365 x $16,000 =  $1,168,000,000,000,000  in fines. Doh! Of course, the FTC doesn’t have the gumption to fine any corporation that much.  Instead they fined Google $22,000,000. 

For comparison, Google’s annual revenue is over $43,000,000,000 (per their 2nd Q 2012 report PDF). $22.5 million divided by $43.16 billion is 0.05213%. A joke in other words, a rounding error. If you made $50,000 a year in gross salary, and you got a fine of this magnitude, you’d pay…wait for it…$26. Yep, just twenty six dollars. Would it be worth it to you to pay a couple bucks a month in exchange for sellable advertising data on 200 million phones and iPads? Hell yes! Those cookies are a large reason why Google makes $43 billion a year, obviously they are valuable!

Google got off way, way too easily.

Let Me Show You How to Eagle Rock
Let Me Show You How to Eagle Rock

What about those incompetent boobs at the Federal Trade Commission? The FTC isn’t very motivated to snoop out privacy invasions in the first place, as Wired reported back in June, 2012:

Jonathan Mayer had a hunch.

The young computer scientist suspected that online advertisers might be following consumers around the web — even when they set their browsers to block the snippets of tracking code called cookies. If Mayer’s instinct was right, advertisers were eying people as they moved from one website to another even though their browsers were configured to prevent this sort of digital shadowing. Working long hours at his office, Mayer ran a series of clever tests in which he purchased ads that acted as sniffers for the sort of unauthorized cookies he was looking for. He hit the jackpot, unearthing one of the biggest privacy scandals of the past year: Google was secretly planting cookies on a vast number of iPhone browsers. Mayer thinks millions of iPhones were targeted by Google.

The feds are often the last to know about digital invasions of your privacy. This is precisely the type of privacy violation the Federal Trade Commission aims to protect consumers from, and Google, which claims the cookies were not planted in an unethical way, now reportedly faces a fine of more than $10 million.  But the FTC didn’t discover the violation. Mayer is a 25-year-old grad student working on law and computer science degrees at Stanford University. He shoehorned his sleuthing between classes and homework, working from an office he shares in the Gates Computer Science Building with students from New Zealand and Hong Kong. He doesn’t get paid for his work and he doesn’t get much rest.

If it seems odd that a federal regulator was scooped by a sleep-deprived student, get used to it, because the federal government is often the last to know about digital invasions of your privacy. The largest privacy scandal of the past year, also involving Google, wasn’t discovered by federal regulators, either. A privacy official in Germany forced Google to hand over the hard drives of cars equipped with 360-degree digital cameras that were taking pictures for its Street View program. The Germans discovered that Google wasn’t just shooting photos: The cars downloaded a panoply of sensitive data, including emails and passwords, from open Wi-Fi networks. Google had secretly done the same in the United States, but the FTC, as well as the Federal Communications Commission, which oversees broadcast issues, had no idea until the Germans figured it out.

(click here to continue reading Your FTC Privacy Watchdogs: Low-Tech, Defensive, Toothless | Threat Level | Wired.com.)

No wonder Google, and Microsoft, and others, spend so much money on lobbyists…

Google spent $5.03 million on lobbying from January through March of this year, a record for the Internet giant, and a 240 percent increase from the $1.48 million it spent on lobbyists in the same quarter a year ago, according to disclosures filed Friday with the clerk of the House.

By comparison, Apple spent $500,000; Facebook spent $650,000 Amazon spent $870,000; and Microsoft spent $1.79 million. Google even outspent Verizon Wireless, a notoriously big spender, which spent $4.51 million.

(click here to continue reading Under Scrutiny, Google Spends Record Amount on Lobbying – NYTimes.com.)

Footnotes:
  1. maybe a little more, I read somewhere the period was 18 months, but we’ll say a year for rounding purposes [↩]
  2. again, estimating. In this case, from an article dated Feb, 12, 2012, noting that Apple sold 156,000,000 in 2011 alone. [↩]

FTC Should Pursue Case Against Google

Seth Anderson4 Comments

Electric Eye
Google’s Electric Eye sees all

Google really has lost whatever ethics it may have once had1 and should really have to pay a price for their latest lapse. Especially since Google and the Federal Trade Commission had an arrangement already, and Google violated it within weeks…

The Stanford privacy researcher who first uncovered Google evading the default privacy settings for all users of Apple’s Safari web browser believes that the Federal Trade Commission has a “slam dunk” case that Google violated its privacy agreement with the government.

“The facts in this case are unusually clear cut,” Jonathan Mayer, a grad student in computer science and law and a researcher at the Stanford Law Center for Internet and Society, in a phone interview with TPM.

…Aside from further tarnishing Google’s image in the press and public at a crucial time (the search giant was at the time getting ready to roll out a controversial new privacy policy), the news led many writers, including TPM, to speculate that Google could be found in violation of a privacy settlement it agreed to with the Federal Trade Commission.

The settlement, first struck in October 2011 , was the result of the FTC’s year-long privacy investigation into Google over its failed Google Buzz social network. The FTC concluded that Google had indeed misled users and violated their privacy and subjected Google to 20 years worth of privacy audits and ordered that Google no longer “misrepresent” its privacy settings to users. If Google violates any of the terms of the settlement, the FTC can slap the company with a $16,000 civil fine for every day that the company violated any of the terms.

On Thursday night, The Journal reported that the FTC “is examining whether Google’s actions violated last year’s legal settlement,” and another regulatory body in France (the CNIL) and several states attorneys general were also investigating Google over the practice and could levy fines of their own.

 

(click here to continue reading FTC Has ‘Slam Dunk’ Case Against Google, Privacy Researcher Says | TPM Idea Lab.)

Or Pay The Price
Or Pay The Price

and from the WSJ:

In the U.S., the Federal Trade Commission is examining whether Google’s actions violated last year’s legal settlement with the government in which Google pledged not to “misrepresent” its privacy practices to consumers, according to people familiar with the investigation.

The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated. The FTC declined to comment.

A group of state attorneys general, including New York’s Eric Schneiderman and Connecticut’s George Jepsen, are also investigating Google’s circumvention of Safari’s privacy settings, according to people familiar with the investigation. State attorneys general can have the ability to levy fines of up to $5,000 per violation.

In Europe, the French Commission Nationale de l’Informatique et des Libertés, or CNIL, has added the Safari circumvention technique to its existing pan-European investigation into Google’s privacy-policy changes, according to a person close to the investigation. The CNIL is the agency that levied a €100,000 ($130,960) fine on Google last year for collecting passwords and other personal information when Google vehicles were gathering information for its Street View map service.

(click here to continue reading Google Faces New Privacy Probes – WSJ.com.)

Google power and deep pockets shouldn’t be enough to evade the law, the FTC should make an example of Google, and really bring the hammer down.

Footnotes:
  1. perhaps it never had ethics and was just better at covering up its questionable decisions. No matter [↩]

The FTC and the Unreasonable Case of Disclosure

Seth Anderson1 Comment

The blogosphere is starting to think about the new FTC regulations we mentioned yesterday. Case in point, Nine reasons why the rules will solve no problem, and just cause headaches:

I'm With Stupid

However, I don’t believe that the new FTC guidelines actually help to further the goals of transparency but rather, instead, the new rules will be rife with abuse and misuse and uneven application. Here’s why:

1. Adversely affects smaller blogs. Small blogs like ours do not have editors. We don’t get paid to review and what we do is truly a labor of love. Yes, we are starting to host ads but we cannot afford a full time editor for our reviews. Blogs without editorial staffs will be subject to the new rules while blogs and mainstream publications, regardless of other issues and relationships, will not. Let me state it this way: the blogs with the highest earning capacity will likely be exempt while the blogs with the lowest earning capacity will not. I found it fascinating that Richard Cleland of the Bureau of Consumer Protection said this:

Cleland said that a disclosure was necessary when it came to an individual blogger, particularly one who is laboring for free. A paid reviewer was in the clear because money was transferred from an institution to the reviewer, and the reviewer was obligated to dispense with the product. I wondered if Cleland was aware of how many paid reviewers held onto their swag.

“I expect that when I read my local newspaper, I may expect that the reviewer got paid,” said Cleland. “His job is to be paid to do reviews. Your economic model is the advertising on the side.”

From Cleland’s standpoint, because the reviewer is an individual, the product becomes “compensation.”

[Click to continue reading The FTC and the Unreasonable Case of Disclosure | Dear Author: Romance Novel Reviews, Industry News, and Commentary]

and Number 7, especially as it pertains to Twitter is a bit of a joke:

Eliminating any relationships. § 255.5 requires disclosure of “material connections”.

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

I’m not sure what this pertains to. I have attended luncheons, parties with publishers. Do I need to explain each and every piece of swag I am ever given? Could I even possibly remember every pen and mint tin I picked up? I doubt it.

It’s important to note that in various interviews around the web and in the Guide itself, the FTC contemplates that any comment, tweet, post on a facebook page, participation on a message board, must be accompanied by the relevant disclosure.

As for Twitter, the FTC isn’t letting you get a pass with the excuse that 140 characters–Twitter’s famous text limit–is simply too short. “There are ways to abbreviate a disclosure that fit within 140 characters,” Cleland said. “You may have to say a little bit of something else, but if you can’t make the disclosure, you can’t make the ad.”

I do wonder how long it will take before this policy is attempted to be enforced, and how long before a high-profile case goes before the courts. Do I have to hire an editor now? An advertising manager so there is a wall between “content” and “advertising”? How come celebrity magazines1 are seemingly exempt from the FTC? If I read another positive review about a Michael Bay film, I may ask the FTC to investigate.

Footnotes:
  1. print and television [↩]

FTC Says Bloggers Must Disclose Payments

Seth Anderson1 Comment

Blog rules have, apparently, changed.

Mictorate Surrogate

– Blogger or flogger? The Federal Trade Commission is taking a tougher line on bloggers who accept cash or gifts to tout a company’s products or services.

Under revised rules announced Monday, the FTC will require bloggers and celebrities to clearly state when they receive cash or “payment in kind” for endorsing a company’s products or services.

The changes, adopted on a 4-0 vote, are the first revisions to federal guidelines on endorsements and testimonial advertising since 1980.

Connections between advertisers and endorsers must be disclosed under the revised guidelines. The FTC said the stricter disclosure will apply to comments on talk shows, blog posts and on social media as well as in traditional advertisements.

[Click to continue reading FTC Says Bloggers Must Disclose Payments – WSJ.com]

But this policy, as reported here and in a similar NYT article, is pretty vague as to terms and definitions. How will it be enforced? Who qualifies as a blogger? Does this policy include Yelp and their pay-to-play model?

Or does the policy include low trafficked sites like your humble host? Does Amazon.com’s mildly dirty lucre qualify as “receiving cash”? Amazon pays me approximately 3% of the pre-tax price of any product that you purchase through a B12 Partners affiliate link1, which reaches peaks of nearly $30 some months, but more frequently is in the single digits. Google ads, over on the sidebar, or possibly inserted into your RSS feed or daily email, pay me a few cents for every click-through, which also adds a few dollars to my bank account every month. I pay more for my website than I make, but I’m not doing it for money, I’m doing it for other2 reasons.

Other than that, B12 Solipsism has not received squat from any product I’ve mentioned, any person I’ve praised or ridiculed, or any event I’ve mentioned. Now and again, someone will suggest a topic to me, but most of the time, I just ignore the PR pitch. Perhaps if there was financial compensation attached to the pitch, or even free tickets, I might pay attention.

Or Else

Besides B12, is the new ruling akin to what television product placement law is? Which is what again? Seem to see a lot of product placement in traditional media, how is a consumer to know which news magazines are running paid-for content, and which are not? How about Congressional leaders? Can the FTC or comparable governmental agency place disclaimers, perhaps in a forehead tattoo form, on health industry shills like Max Baucus for instance?

The FTC Guide, as currently written, seems woefully unenforced. Nearly all of the Sunday Talking Head shows seem to skirt the endorsement guidelines. Will that change too?

For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) which message consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group or institution.

(c) For purposes of this part, the term product includes any product, service, company or industry.

(d) For purposes of this part, an expert is an individual, group or institution possessing, as a result of experience, study or training, knowledge of a particular subject, which knowledge is superior to that generally acquired by ordinary individuals.

[Click to continue reading FTC GUIDES CONCERNING USE OF ENDORSEMENTS AND TESTIMONIALS IN ADVERTISING ]

Live High aka High Life

Anyway, we’ll probably read more about this in the future, but B12 Solipsism readers can sleep easy tonight knowing that we are not paid blogger shills3 ,4 ,5

Footnotes:
  1. such as the images of books-recently-purchased residing on the blog sidebar [↩]
  2. heretofore unknown [↩]
  3. though, Corporate America, our lines of communication are open, hint, hint [↩]
  4. no, not really, we’ll probably just make fun of you. [↩]
  5. but maybe not, if the price is right! [↩]

Reading Around on October 5th

swanksalot0 comment

Some additional reading October 5th from 10:44 to 17:11:

  • Study Proposes New Interstate To Link Illinois, Indiana – Chicagoist – The proposed interstate, dubbed The Illiana Expressway, could cut congestion significantly along with providing a surge to the region’s economy. The proposed 25 to 30 mile stretch, operating as a tollway, would connect I-57 in Will County with I-65 in Lake County, Indiana and would cost as much as $1 billion.
  • Kenny Be: “I’d rather be gay than GLAAD” – Denver News – The Latest Word – In this week’s cover story, longtime Westword cartoonist Kenny Be strikes back at GLAAD, which recently named Kenny the “worst” of July. Pick up a copy, or click through here to see the full cartoon.

    It is always nice to be noticed, but for the Gay and Lesbian Alliance Against Defamation (GLAAD) to name me the “Worst of the National Media” for July of 2009 only reveals GLAAD’s ignorance, not mine.

  • Bloggers Must Disclose Payments for Reviews – NYTimes.com – “The Federal Trade Commission will require bloggers to clearly disclose any freebies or payments they get from companies for reviewing their products.

    But the commission stopped short Monday of specifying how bloggers must disclose any conflicts of interest.”
    I haven’t gotten any schwagg, other than Amazon affiliate percentages, but I’m open to receiving free stuff in return for reviewing them…

Reading Around on July 6th through July 7th

swanksalot0 comment

A few interesting links collected July 6th through July 7th:

  • Sarah Palin Speaks to ABC News – ABC News – Palin said there is a difference between the White House and what she has experienced in Alaska. If she were in the White House, she said, the “department of law” would protect her from baseless ethical allegations.

    “I think on a national level, your department of law there in the White House would look at some of the things that we’ve been charged with and automatically throw them out,” she said.

    There is no “Department of Law” at the White House.

  • Where in the World Are the Federal Trade Commissioners? | Mother Jones – Since President George W. Bush appointed Kovacic to a Republican slot in 2006, he has averaged nearly 100 days of foreign travel a year. So far in 2009, he has been abroad for more than 60 days. (He spent the end of June in Taiwan, Rome, and London, and celebrated July 4th in China at a conference on competition law.)

    All this jetting about appears somewhat out of sync with the commission’s largely domestic role. The FTC’s wide-ranging mandate includes everything from enforcing used car sales regulations to ensuring that clothing manufacturers properly instruct consumers whether or not to put their shirts in the dryer. It runs the “do not call” registry to keep telemarketers at bay and cracks down on bogus weight loss cures. The agency also shares responsibility with the Justice Department for overseeing mergers and acquisitions of big companies and enforcing antitrust laws.

  • Retro Comedy: The 15 Creepiest Vintage Ads Of All Time – “What do murder, pedophilia, suicide and a baby tiger have in common? They have all been used to sell stuff in these amazingly disturbing vintage ads!

    These are real, untouched advertisements from the good old days. It doesn’t matter if it’s lovely ladies or adorable clowns, somehow these old-time ad wizards found ways to traumatize us while pedaling everyday products.”

    Some of these I’ve seen before, but some were new-to-me

Free Credit Report

Seth Anderson1 Comment

Free credit report, umm, not so fast. It’s really $14.95 a month. Gotcha!

“It’s called FreeCreditReport.com,” he said. “It’s kind of easy to make that assumption. I didn’t see anything in the process of signing up that said, ‘Hey, if you don’t cancel in 30 days or whatever, you’re going to get charged.’ ”

Consumer groups have long objected to sites like FreeCreditReport.com. Consumers may obtain a free credit report each year from the three major agencies, as mandated by an act that Congress passed in 2003. The only authorized site for that is AnnualCreditReport.com.

The three major credit bureaus, Experian, Equifax and TransUnion, are required to offer reports through the authorized AnnualCreditReport.com, but the bureaus also make money from their own credit reports.

Experian, which owns FreeCreditReport.com, increased both its site visitors and new member sign-ups by 20 percent in 2007.

[From Advertising – The High Cost of a ‘Free Credit Report’ – NYTimes.com]

I should sign up, actually. This post is a public note to myself to see what lies are contained on my consumer DNA file. As long as I don’t sign up in the wrong place:

The FTC has received complaints from consumers who thought they were ordering their free annual credit report online. Some consumers responded to TV ads, email offers, or simply searched online.

The FTC recently settled a lawsuit against Consumerinfo.com – which did business as Experian Consumer Direct – over the “free credit report” promotion it advertised on television, radio and the Internet, including its websites freecreditreport.com and consumerinfo.com.