Mark Cuban Falsely Tells Congress AT&T's Latest Mega-Merger Will Be Really Wonderful For Consumers

from the you're-not-helping dept

Earlier this year, AT&T announced that it planned to shell out $100 billion to acquire Time Warner. That comes on the heels of the company spending $70 billion to acquire DirecTV. Why is AT&T spending countless billions on content and a legacy satellite TV provider when the lion's share of the company's broadband network desperately needs upgrading? Because fixed and wireless broadband subscriber growth has slowed, and telco executives believe they need to turn to content and advertising (read: slinging videos at Millennials) to please investors.

Under fire for the anti-competitive repercussions of its latest deal, AT&T testified this week before the Senate Judiciary Subcommittee on Antitrust, Competition Policy & Consumer Rights. As you might expect, AT&T and Time Warner both breathlessly insist that there are absolutely no downsides to the companies' merger, adding the deal would be an incredible boon to consumers and the video market alike:

"Together, AT&T and Time Warner will disrupt the entrenched pay-TV models giving customers more options, creating more competition for cable TV providers,” AT&T CEO Randall Stephenson said.

“By joining forces, we will accelerate the development and delivery of the next generation of video services that provide consumers with greater choice, convenience, value, and affordability,” Time Warner CEO Jeff Bewkes told lawmakers in prepared testimony.

The problem is that's not really true. Most streaming providers are worried that AT&T, which just launched its new "DirecTV Now" streaming service, will make it harder than ever for streaming competitors to license the content (HBO, etc.) they need to compete. Similarly, many (including the outgoing FCC) are concerned that AT&T's decision to zero rate this DirecTV Now content (exempting AT&T's content from usage caps while still penalizing competitors) twists and distorts the open market. AT&T already effectively eliminated a TV market competitor when it acquired DirecTV. Now it's tilting the playing field unfairly in its favor.

These concerns received fleeting lip service at this week's hearing. Instead, the committee spent a significant amount of time listening to folks like Mark Cuban, who attended the hearing to lavish praise on AT&T's latest mega-merger:

“We need more companies ... with the ability to compete with Apple, Google, Microsoft, Amazon and Facebook. Delivering content to consumers in this app-driven world is not easy, it is very expensive and difficult. ... Alone, it will be very difficult, if not impossible for either AT&T or Time Warner to compete with any of the companies I've mentioned. Together it will still be difficult, but a combined entity at least gives them a chance to battle the dominant players in the marketplace and increase consumer choice and competition for consumer attention."

So one, AT&T is a massive telecom conglomerate that not only owns its own core and last mammoth nationwide network, but also is already the biggest TV provider in the country after its DirecTV acquisition. This scale provides AT&T immeasurable benefits in content negotiations, and the idea that it was in any way difficult for AT&T to compete in this space is laughable. That's before you even mention AT&T's incredible and often comedic lobbying influence on state and federal telecom and media policy. A helpless little daisy, AT&T is not.

And while DirecTV Now might bring some added streaming competition to the space, it's not like Apple, YouTube, Hulu, Sling TV, Sony, HBO and countless other companies aren't flooding into the streaming video space as well. The competition is already coming to this market. Another mega-merger doesn't help this competition, it actively harms it. AT&T is a company with a long, rich history of anti-competitive behavior and defrauding its own customers on multiple occasions. That it will use this expanded size and power in an anti-competitive fashion isn't theoretical. This is what AT&T does.

But zero rating is complicated. Understanding the perils of vertical integration and the threat of one company owning the content and the conduit is difficult. Realizing that AT&T all but owns state and federal government is inconvenient. As such, Cuban tried to trot out a somewhat bizarre little story in which he argues that the AT&T merger would be really wonderful for joe, beer-drinkin' consumer, because, uh, algorithms:

"I would also like to point out one other important element of consumer choice that an AT&T and Time Warner merger would improve.

Each of the largest content companies I have mentioned so far, Facebook, Google, Amazon, Microsoft and Apple present much if not all of their content algorithmically. As a Facebook user I don’t get to pick what content I get to see in my newsfeed. I can try to influence it, but Facebook algorithms control what I see.

In the future, it won’t be algorithms that choose what we see, our choices will be driven by some form of Artificial Intelligence learning from trillions of disparate inputs.

Meanwhile, for those of us who still enjoy our TV the old-fashioned way, on our couch, cold beverage in one hand and remote in the other, there is a lot to be said for having a company that can afford to continue to offer us that choice. As much of a geek as I am, I like having the choice of searching through a programming guide to see what’s on rather than an algorithm telling me what I should watch. I think a lot of consumers would like to see that choice continue as well."

So one, that entire story makes no goddamned sense. Because Apple, Google and Facebook use algorithms in their news feeds, it's a good idea to let a company with a massive history of anti-competitive behavior grow immeasurably larger? AT&T somehow will provide us with purer access to programming guides free of the nefarious influence of Silicon Valley artificial intelligence? That's so illogical I can't even deconstruct the point Cuban's trying to make. It's like arguing that forest fires are good because pineapples exist.

Granted we've noted a few times that while Cuban has a solid grasp of a number of issues, net neutrality, telecom and media issues aren't among them. As such, he should probably be the last person testifying on the subject before Congress. In fact in writing this piece, I stumbled upon something I wrote for Techdirt back in 2014 when (again) trying to highlight that Cuban doesn't really understand net neutrality:

"Of course Cuban has already made his fortune. Were we to take 1995 Mark Cuban (who was busy building Broadcast.com) and transplant his business into the modern era under AT&T, Verizon and Comcast -- you can be damn sure he'd be taking a very different approach to these issues. Cuban has spent a decade making it abundantly clear he doesn't understand net neutrality, the telecom market or the potential pitfalls of these new cap exempt business models. Perhaps we should put Mark Cuban, Donald Trump and all the rest of the billionaires with plenty to say but little actual understanding in charge of the telecom industry. At least we'd get some entertainment value out of the equation while the Internet burns.

Clearly I opened a portal to another dystopian dimension, and for that I'm truly sorry.

Filed Under: consumers, internet, mark cuban, mergers, tv
Companies: at&t, directv, time warner

AT&T Tells FCC That Giving Its Own Content An Unfair Market Advantage Is Good For Consumers

from the the-death-knell-of-net-neutrality dept

We've noted a few times that the whole net neutrality debate truly started back in 2005, when then AT&T CEO Ed Whitacre proudly proclaimed that he wasn't going to let Google "ride his pipes for free." While AT&T's rhetoric has mutated slightly over the years, its core objective has remained the same: use its monopoly over broadband to extract unnecessary "troll tolls" from competitors, giving its own services an unfair advantage. It's precisely this kind of behavior that triggered the creation of net neutrality rules in the first place; an effort that took more than a decade of fighting tooth and nail to come to fruition.

And yet here we are a decade later, with the entire concept of net neutrality in the United States about to implode in truly spectacular and depressing fashion (assuming you like markets that function properly).

We've been talking about how AT&T intends to exempt its upcoming "DirecTV Now" streaming service from the company's own, arbitrary usage caps -- while still penalizing competing services. In other words, if you use AT&T's TV service you won't run into caps, throttling, or surcharges. But use a competitor and you will be penalized, whether that's Netflix or instructional videos from a non-profit or educational institution. This is precisely why people urged the FCC to join countries like India, Japan, Norway and The Netherlands and ban zero rating entirely. The FCC didn't listen.

But last week the FCC appears to have woken briefly from its year-long slumber on the subject; long enough to pen a letter to AT&T informing them that the agency had finally realized that this sort of behavior was horrible for the streaming video market:

"In the letter to AT&T from the FCC's Jon Wilkins, the agency states that this behavior "may obstruct competition and harm consumers by constraining their ability to access existing and future mobile video services not affiliated with AT&T."

"It is not difficult to calculate usage scenarios in which an unaffiliated provider's Sponsored Data charges alone could render infeasible any third-party competitor's attempt to compete with the $35 per month retail price that AT&T has announced for DIRECTV Now," the letter said. "Unaffiliated video providers not purchasing Sponsored Data would likewise face a significant competitive disadvantage in trying to serve AT&T Mobility's customer base without zero-rating."

AT&T responded in a letter back to the FCC This week (pdf), claiming that giving its own content an unfair market advantage is going to be really wonderful for consumers:

"These initiatives are precisely the kind of pro-consumer challenges to cable that the Commission heralded in approving AT&T's acquisition of DIRECTV...DIRECTV’s sponsorship of that content through Data Free TV allows DIRECTV to better compete against the cable incumbents by ensuring that its subscribers receive the mobile video experience they increasingly demand in the most consumer-friendly manner possible.

Sure, unfairly distorting the market so your content and services get a leg up on competitors is great for AT&T, but it comes at the cost of dismantling the level streaming video playing field. Of course that has been AT&T's goal all along. All of the lawsuits, misleading rhetoric, and farmed studies have always been about one thing for AT&T: protecting its ability to abuse its stranglehold over the broadband last mile to unfair advantage. Calling this molestation of functional markets a consumer benefit only adds insult to obvious injury.

Amusingly, AT&T also tries to tell the FCC that it's not a big deal that it's giving its own content an unfair advantage, because other companies can get the same priority treatment -- if they're willing to pay AT&T for the privilege:

"The suggestion that Data Free TV creates “significant disadvantages” for online video distributors who wish to reach AT&T’s wireless subscribers is likewise off-base. Any unaffiliated content provider can participate in AT&T’s Sponsored Data program on the same terms and at the same rate as DIRECTV, and the sponsored data rate is as low as the market based rates AT&T currently offers even to wireless resellers who commit to significant purchase volumes."

That's AT&T intentionally pretending that it doesn't own DirecTV, if you're playing along at home. Sure, you can get the same exact deal as AT&T's own company gets, but you have to pay a premium to do so. But that again distorts the streaming video market, given that large companies are far more likely to be able to afford AT&T's troll toll than startups, non-profits, or other competitors. There's simply no planet where what AT&T's doing shouldn't be seen as anti-innovation and anti-competitive.

And while it's nice that the FCC at least woke up a little bit to the threat of usage caps and zero rating, this entire mess is, in large degree, thanks to the FCC's failure to craft tougher net neutrality rules. The agency ignored net neutrality advocates and didn't ban zero rating outright. And despite claiming it would take a "case by case" approach to anti-competitive behavior on this front, the FCC turned a blind eye while Comcast, Verizon and AT&T all began taking advantage of the omission to give their own content a leg up. Now, it's incredibly unlikely we'll see actual FCC enforcement on this subject anytime soon, if ever.

It seems possible the FCC expected it would have time to examine the issue further under a Clinton administration. But with Trump's surprise win of the Presidency, it's not only likely that anti-competitive abuses of zero rating will never be banned, Trump's FCC transition team is giving every indication that they intend to dismantle the net neutrality rules we do have, entirely. With no hyperbole intended, you're witnessing the death of net neutrality, and it's arriving not with a bang but with a whimper, some smug AT&T platitudes, and the thunderous applause of a misled populace that thinks it's getting something for free.

Filed Under: competition, consumers, fcc, zero rating
Companies: at&t, directv

AT&T's $85 Billion Time Warner Buy Could Be An Anti-Consumer Shit Show Of Monumental Proportions

from the synergies-ahoy dept

As fixed and wireless broadband growth crawls to a halt and cord cutting begins to hammer TV numbers, incumbent telecom giants have been trying to pivot into the media and advertising game with mixed results. Verizon so far has shelled out billions to acquire aging 90s internet brands Yahoo and AOL, believing this can somehow transform the stodgy duopolist into a sexy, sleeker Facebook and Google competitor. So far these efforts to woo Millennials have been arguably underwhelming and occassionally comical, highlighting how innovation and disruption is somewhat foreign to these companies' DNA.

AT&T has decided to follow a similar tack, over the weekend announcing a mammoth $85 billion deal to acquire Time Warner (not to be confused with Time Warner Cable) and its media properties (CNN, HBO). AT&T was quick to proclaim that the deal would be a "perfect match of two companies with complementary strengths," who can bring a "fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers." The deal comes not too long after AT&T decided to spend $79 billion to acquire DirecTV, adding notable debt for the already giant company.

AT&T's decision to announce the deal now signals that it believes, or has been directly told, that regulators (both the tail end of Wheeler's term and his replacement in the new year) would look kindly upon such a deal. But given AT&T's long, rich history of aggressive anti-consumer behavior (and just blatant lying to prop up past mergers), there's more than a few justified questions raised about AT&T growing larger.

This is, after all, a company that in the last four years alone has been fined for ripping off programs designed for low-income households, ripping off programs designed to aid the hearing impaired, actively aiding drug dealing directory assistance scammers, and making bills harder to understand to help crammers. It's the same company that fought viciously against net neutrality, and is busy using "zero rating" to begin giving its own content an unfair advantage in the market. Yes, what could possibly go wrong with letting AT&T grow immeasurably larger?

Letting one company control an ocean-sized portion of all progamming and the conduit to the home has always been controversial. And while regulators did set some conditions to Comcast's 2011 acquisition of NBC Universal, it was found that Comcast ignored many of those conditions, ultimately leading to regulators blocking its subsequent acquisition attempt of Time Warner Cable.

In this case, AT&T is making it clear that the acquisition is all about the company's upcoming launch of its DirecTV Now streaming video service:

"Both Mr. Stephenson of AT&T and Jeffrey L. Bewkes of Time Warner stressed that during nearly three months of deal negotiations, the idea driving the talks was that Time Warner could help AT&T build out its own video streaming service. That service, called DirecTV Now, is Mr. Stephenson’s response to the migration of consumers toward mobile and online video watching and away from traditional cable packages."

Owning that much content certainly makes licensing easier for AT&T. The problem, again, is that the current FCC has refused to seriously address zero rating (giving your own content a broadband cap exemption while still penalizing Netflix) as a potential anti-competitive weapon. AT&T, in response, has made it abundantly clear that zero rating will play a huge role in this upcoming service. Regulators could ban AT&T from using zero rating to favor Time Warner content, though history has shown enforcement of these promises is inconsistent.

And that's before you get to the spectre of AT&T almost certainly (based on past behavior) using its role as a broadcaster to hamstring the streaming services that hope to compete with it. Or AT&T's abysmal history on privacy issues, be that the use of stealth cookies to track user behavior without consent, or the company's attempts to charge users more money just to opt out of private data collection and sales. AT&T's also fighting tooth and nail against new FCC broadband privacy protections the agency is expected to vote on later this week.

In short, AT&T apparently believes that the best way to navigate a dramatically changing TV landscape that requires flexibility and innovation is to grow bigger and clumsier than ever.

The company has been losing broadband, TV, and postpaid phone subscribers the last few quarters. Executives apparently believe the best solution is to strike a series of massive traditional media deals (with valuations based on peak TV earnings and cash flow) just as the traditional TV sector prepares for a free fall. AT&T bought a satellite TV giant on the eve of the cord cutting revolution, and now aims to buy a traditional media giant just as the TV market begins truly entering an identity crisis. But there's absolutely no indication that any of these deals will make AT&T magically more relevant to Millennials, or that vertical integration between distributors and content producers is still a guaranteed route to success.

That doesn't mean AT&T won't engage in anti-competitive behavior to try and make it work. Once AT&T launches its new streaming service, the company could make it much harder than ever for competing streaming providers to license the programming necessary to compete with it. AT&T could also zero rate its own content, further penalizing streaming video providers trying to compete in the space. And again, that's before you get to AT&T's history on privacy or any other creative new efforts AT&T will cook up to use its significantly larger scale and broadband monopoly to unfair advantage.

This being election season, the Presidential hopefuls were quick to chime in (sort of). Hillary Clinton gave somewhat of a non-answer by saying that she "certainly thinks regulators should look at" the deal (as if regulators tasked to review a deal would do anything else). It was actually Donald Trump's camp that issued the clearest opposition to the deal:

"This oligopolistic realignment of the American media along ideological and corporate lines is destroying an American democracy that depends on a free flow of information and freedom of thought,” Peter Navarro, a senior economic adviser to Mr. Trump, said in a statement on Sunday.

Broken clocks, twice a day, etc. All told there's little to any indication that the deal would be good for consumers, AT&T competitors or small businesses. But there are also doubts that regulators under the (likely) Clinton administration would stop the deal, if her non-answer and the notable amount of telecom money headed in the Clinton camp's direction is any indication. Regardless of the regulatory response, history suggests it should at least be fun watching AT&T's lawyers, lobbyists, and armies of think tankers once again try to spit shine the company's latest attempt to become larger and more powerful than ever.

Filed Under: acquisition, antitrust, consumers, doj, fcc, merger
Companies: at&t, time warner

MPAA Boss: Actually Being Good To Consumers Would Be Horrible For Hollywood

from the how-is-this-person-in-charge? dept

MPAA boss Chris Dodd has apparently decided to take the fairly insane stance that what's good for the public is clearly bad for Hollywood. That's the only conclusion that can come from the news that he's actively campaigning against the EU ending geoblocking rules:

In a keynote address at the CineEurope convention this week, MPAA Chairman and CEO Chris Dodd described the unblocking goals as a threat to the movie industry. Encouraging participants to reach out to their representatives, Dodd described the concerns as “real, very real.”

“While the stated goals of these proposals are laudable – offering greater choice to European consumers and strengthening cultural diversity – in reality, these ideas could actually cause great harm to Europe’s film industries and its consumers,” Dodd said.

Opening up more markets and more users, while having less overall friction will be bad for the film industry? Only if it's run by complete idiots who don't know how to take advantage of a larger market. But, I guess that's the MPAA way!

Of course, it's not hard to understand what Dodd is really talking about. For years, Hollywood has been able to squeeze extra money out of a convoluted and corrupt manner of territorial licensing -- a system that may have made sense in a pre-modern world, but which hasn't made any sense at all in decades. But because the Hollywood studios abuse that system for profit, often making it impossible for people to see the content they want to see (and are willing to pay for), it doesn't want to change that system.

But, because it's Hollywood, they have a mythical fairy tale to try to make it all make sense:

“The European Union is made up of 28 different nations with different cultures, different languages, and different tastes. Forcing every film to be marketed and released the same way everywhere, at the same time, is a recipe for failure,” Dodd said.

“The ability of filmmakers and distributors to market and release their films where, how, and when they think best gives them the greatest chance to succeed,” he added.

Of course, this is the EU where (at least while the EU lasts... as may now suddenly be in doubt...) people are able to travel freely across borders. Which means that the country you live in may not be the country you grew up in, nor match the same cultural sensibilities. And, these days, it's entirely possible to market films through the internet to find their intended audiences. The idea that by getting rid of geoblocking you suddenly change any of the above points makes no sense. The films that are targeted in one geography can still be proactively marketed in those geographies -- it's just that they will also be available to people from those regions who now live elsewhere (again, making it accessible to a wider audience).

But, again, this is the MPAA that is so focused on locking things down and limiting consumers, it still doesn't realize that treating its customers badly is why the MPAA is so hated.

Filed Under: chris dodd, consumers, digital single market, geoblocking, hollywood, movies
Companies: mpaa

As Broadband Usage Caps Expand, Complaints To The FCC Skyrocket

from the pay-more-for-the-same-service dept

For several years now, broadband providers have been taking full advantage of the lack of competition in the broadband market by expanding usage caps and overage fees. More recently, companies like AT&T, Comcast and Suddenlink have taken this practice one step further by charging users a $10 to $35 per month surcharge if consumers want to avoid usage caps. In other words, consumers are paying more money than ever for a service that costs less and less to provide, thanks again to limited competition in the broader broadband market.

And while companies like Comcast have used the same approach seen in the boiling frog metaphor to slowly expand its usage cap "trials" and hope nobody notices, people are definitely noticing the rising temperatures. The Wall Street Journal filed an FOIA request with the FCC, and has found that consumer complaints about broadband caps have been skyrocketing over the last year:

"Fearful of crossing data limits, some customers say they are canceling the streaming services, including Netflix, Sling TV and Sony PlayStation Vue. Consumer complaints to the Federal Communications Commission about data caps rose to 7,904 in the second half of 2015 from 863 in the first half, according to records reviewed by The Wall Street Journal under the Freedom of Information Act. As of mid-April, this year’s total was 1,463."

Though we've warned about this for years, the Journal almost-but-not-quite comes to the realization that usage caps have nothing to do with congestion or financial necessity, and everything to do with hamstringing Internet video and protecting legacy TV revenues. Companies like SlingTV and Netflix make that abundantly clear in their comments to the Journal, though Comcast clings to a familiar narrative in trying to justify why it's charging more money for the same service:

"Comcast says its aim is to ensure the heaviest users are paying more than lighter ones, since 50% of its bandwidth is consumed by just 10% of its customers. Comcast set up the trials to show “people who are consuming the most should carry more of the bill rather than raise everybody’s bill by the same amount,” says Marcien Jenckes, executive vice president of consumer services at Comcast."

But we've long noted how that justification is nonsense. The cable industry itself admitted years ago that congestion had nothing to do with usage caps. Comcast's own leaked support documents and comments from company engineers have also acknowledged as much. Meanwhile, if a small fraction of your customers are consuming an "excessive" amount of bandwidth (and ISPs never provide hard data on this front), you could easily push them to business-class tiers without having to impose a draconian and confusing new pricing paradigm on your entire customer base.

No, Comcast is imposing usage caps to simultaneously cash in on, and thwart, Internet video. Granted the company can't just come out and admit that, so we often see flimsy claims that imposing huge new rate hikes on its entire userbase is about fairness, even if Comcast's cost to deliver broadband services remains fixed or declining. Not too surprisingly, Comcast tells the Journal that the company's a gift to the Internet and would never, ever behave anti-competitively:

"We everyday contribute to the use and the growth of the Internet,” Mr. Jenckes says. “There is absolutely no anticompetitive belief or objective."

The reality is that when it comes to complaints about caps, we're only starting to see the tip of the consumer annoyance iceberg. Not only are companies expanding usage caps, companies like Comcast are now exempting their own content from these caps -- a fantastic way to give their otherwise underwhelming Netflix alternatives an unfair advantage in the market. Other companies like AT&T are using usage caps to attack cord cutters in another way, by socking them with overage fees unless they sign up for traditional TV services they may no longer even want (something AT&T tells the Journal is just a "really compelling" offer).

And despite the soaring complaints, and the broad anti-competitive implications of such arbitrary limits, the FCC has remained largely mute about usage caps -- often supporting the industry narrative that this is just "creative pricing experimentation." The hope at the FCC has been that its policies to encourage broadband competition will make a specific crackdown on usage caps unnecessary, but so far it certainly hasn't worked that way. Though less talked about, it's also a problem that the FCC has failed to ensure that ISP usage meters are accurate; as a result they often aren't, with some consumers being billed for usage when their modem is off or the power is out.

Broadband competition isn't going to magically fix itself, and outside efforts like Google Fiber or community broadband are only helping a fraction of the market. As such, complaints submitted to FCC systems will only grow as more and more consumers realize that usage caps and overage fees are a giant con perpetrated on an already annoyed and captive market.

Filed Under: broadband, complaints, consumers, data caps, fcc, isps, usage caps

Complaint To FTC Says It’s 'Deceptive' For Google To Not Recognize 'Right To Be Forgotten' In US

from the what-the...? dept

If you want an understanding of my general philosophy on business and economics, it's that companies should focus on serving their customers better. That's it. It's a very customer-centric view of capitalism. I think companies that screw over their customers and users will have it come back to bite them, and thus it's a better strategy for everyone if companies focus on providing good products and services to consumers, without screwing them over. And, I'm super supportive of organizations that focus on holding companies' feet to the fire when they fail to live up to that promise. Consumerist (owned by Consumer Reports) is really fantastic at this kind of thing, for example. Consumer Watchdog, on the other hand, despite its name, appears to have very little to do with actually protecting consumers' interests. Instead, it seems like some crazy people who absolutely hate Google, and pretend that they're "protecting" consumers from Google by attacking the company at every opportunity. If Consumer Watchdog actually had relevant points, that might be useful, but nearly every attack on Google is so ridiculous that all it does is make Consumer Watchdog look like a complete joke and undermine whatever credibility the organization might have.

In the past, we've covered an anti-Google video that company put out that contained so many factual errors that it was a complete joke (and was later revealed as nothing more than a stunt to sell some books). Then there was the attempt to argue that Gmail was an illegal wiretap. It's hard to take the organization seriously when it does that kind of thing.

Its latest, however, takes the crazy to new levels. John Simpson, Consumer Watchdog's resident "old man yells at cloud" impersonator, recently filed a complaint with the FTC against Google. In it, he not only argues that Google should offer the "Right to be Forgotten" in the US, but says that the failure to do that is an "unfair and deceptive practice." Really.

As you know by now, since an EU court ruling last year, Google has been forced to enable a right to be forgotten in the EU, in which it will "delink" certain results from the searches on certain names, if the people argue that the links are no longer "relevant." Some in the EU have been pressing Google to make that "right to be forgotten" global -- which Google refuses to do, noting that it would violate the First Amendment in the US and would allow the most restrictive, anti-free speech regime in the world to censor the global internet.

But, apparently John Simpson likes censorship and supporting free speech-destroying regimes. Because he argues Google must allow such censorship in the US. How could Google's refusal to implement "right to be forgotten" possibly be "deceptive"? Well, in Simpson's world, it's because Google presents itself as "being deeply committed to privacy" but then doesn't abide by a global right to be forgotten. Really.

“The Internet giant aggressively and repeatedly holds itself out to users as being deeply committed to privacy. Without a doubt requesting the removal of a search engine link from one’s name to irrelevant data under the Right To Be Forgotten (or Right to Relevancy) is an important privacy option,” Consumer Watchdog’s complaint said. “Though Google claims it is concerned about users’ privacy, it does not offer U.S. users the ability to make such a basic request. Describing yourself as championing users’ privacy and not offering a key privacy tool – indeed one offered all across Europe – is deceptive behavior.”

That's, uh, not how this all works. In his complaint to the FTC, Simpson's theory is laid out in all its kooky nuttiness. Basically, because in the past we didn't have technology, and things would get forgotten thanks to obscurity -- and because Google claims to support privacy, it must magically pretend that we still live in such an age, and agree to forget stuff people want it to forget. He'd also, apparently, like Google to get off his lawn.

Here is why the Right To Be Forgotten – or Right of Relevancy – is so important to protecting consumers’ privacy in the digital age: Before the Internet if someone did something foolish when they were young – and most of us probably did – there might well be a public record of what happened. Over time, as they aged, people tended to forget whatever embarrassing things someone did in their youth. They would be judged mostly based on their current circumstances, not on information no longer relevant. If someone else were highly motivated, they could go back into paper files and folders and dig up a person’s past. Usually this required effort and motivation. For a reporter, for instance, this sort of deep digging was routine with, say, candidates for public office, not for Joe Blow citizen. This reality that our youthful indiscretions and embarrassments and other matters no longer relevant slipped from the general public’s consciousness is Privacy By Obscurity. The Digital Age has ended that. Everything – all our digital footprints – are instantly available with a few clicks on a computer or taps on a mobile device.

[....]

Google’s anti-consumer behavior around privacy issues is deceptive. The Internet giant holds itself out to be committed to users’ privacy, but does not honor requests that provide a key privacy protection. Google explains: “We know security and privacy are important to you – and they are important to us, too. We make it a priority to provide strong security and give you confidence that your information is safe and accessible when you need it. We’re constantly working to ensure strong security, protect your privacy, and make Google even more effective and efficient for you.” Recently Google said, “Protecting the privacy and security of our customers’ information is a top priority, and we take compliance very seriously.” In its Privacy & Terms Technologies and Principles Google claims, “We comply with privacy laws, and additionally work internally and with regulators and industry partners to develop and implement strong privacy standards… People have different privacy concerns and needs. To best serve the full range of our users, Google strives to offer them meaningful and fine-gained choices over the use of their personal information.”

In other words the Internet giant aggressively and repeatedly holds itself out to users as being deeply committed to privacy. Without a doubt requesting the removal of a search engine link from one’s name to irrelevant data under the Right To Be Forgotten (or Right to Relevancy) is an important privacy option. Though Google claims it is concerned about users’ privacy, it does not offer U.S. users the ability to make this basic request. Describing yourself as championing users’ privacy while not offering a key privacy tool – indeed one offered all across Europe – is deceptive behavior.

This is an absolutely insane interpretation of "deceptive." A company that supports user privacy is not being deceptive just because its definition of privacy doesn't match your crazy definition. It's just a different policy. If Google had flat out said that it would support a "right to be forgotten" in the US and then refused to process any requests, that would be deceptive. But accurately stating what the company does is not deceptive, no matter what Simpson seems to think.

What about the "unfair" part of "unfair and deceptive"? I honestly can't summarize the logic because there is none. Apparently, some people might not like what searches on their name turn up, and that's bad and thus... unfair?

Not offering Americans a basic privacy tool, while providing it to millions of users across Europe, is also an unfair practice. Acts or practices by a business are unfair under Section 5 of the Federal Trade Commission Act if they cause or are likely to cause substantial injury to consumers that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing benefits to consumers or competition.6 Here are some examples of people who have been harmed by Google’s refusal to honor Right of Relevancy or Right To Be Forgotten removal requests in the United States. Clearly there is no countervailing benefit in continuing to link to the items from search results. Consider these examples:

• A young California woman was decapitated in a tragic auto accident. Photos from the grisly accident scene were wrongfully leaked by California Highway Patrol officers and posted to the Internet. A search on her name still returns the horrible photographs.
• A guidance counselor was fired in 2012 after modeling photos from 20 years prior surfaced. She was a lingerie model between the ages of 18-20, and she had disclosed her prior career when she first was hired. Despite this, when a photo was found online and shown to the principal of her school, she was fired.

I don't see how any of this is "protecting consumers." It's seems quite the opposite, actually. It seems to be assuming that the public is made up of pure idiots who can't ever figure out context or understand that sometimes bad things happen. But that's not true. People learn and adapt and adjust to new technologies, even as people like John Simpson fear them. When cameras first started becoming popular they were banned from beaches because people might take photographs of other people there. But people grew up and realized that wasn't destroying anyone's privacy. Simpson has this weird infatuation not with protecting consumers, but with censoring the internet to keep the public from knowing factual information, because apparently he thinks the public can't handle it.

Last week, on On The Media, host Bob Garfield pointed out to Simpson how ridiculous all of this was, and Simpson doesn't have a single reasonable response. Garfield points out that public information, even embarrassing public information, is, by definition, not private information, and thus there's no privacy violation here. And all Simpson can do is pull his nostalgia gig about how things used to be different when people would forget your embarrassing things in the past. But that doesn't answer the question at all. It just makes Simpson seem totally out of touch with the modern world.

Filed Under: consumers, deceptive, ftc, john simpson, privacy, right to be forgotten, unfair
Companies: consumer watchdog, google

Google To EU: You Know, No One Really Uses Our Vertical Search Products

from the fine-lines dept

As was widely expected yesterday, the EU has officially come out with its "Statement of Objections" to Google practices that are at the heart of its antitrust complaint. They are almost entirely focused on the fact that Google promotes its own shopping search product at the expense of competitors. From the announcement:

• Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.
• Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google's general search results pages.

• Froogle, Google's first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.
• As a result of Google's systematic favouring of its subsequent comparison shopping services "Google Product Search" and "Google Shopping", both experienced higher rates of growth, to the detriment of rival comparison shopping services.
• Google's conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google's product.

This somewhat echoes the FTC's analysis of Google's playing with shopping search -- but the FTC also noted that the end results actually seemed to be good for consumers (something the EU appears to be less concerned with). Here was the FTC's conclusion on the same issue:

Indeed, the evidence paints a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google's monopoly power over search and search advertising. The determination that Google's conduct is anticompetitive, and deserving of condemnation, would require an extensive balancing of these factors, a task that courts have been unwilling- in similar circumstances - to perform under Section 2. Thus, although it is a close question, Staff does not recommend that the Commission move forward on this cause of action.

In short, it is clear that Google experimented with ways to improve its own shopping search performance, but it's hard to see how some of the EU's complaints make that much sense. What business is required to promote it competitors?

Either way, Google is now in the somewhat awkward position of pointing out that its own vertical search products both are good enough to deserve the treatment Google gave them, yet bad enough that no one actually uses them. Thus it has put out a somewhat hilarious blog post that talks about how little people actually use Google's vertical search products while also highlighting how many competitors there are. Here, for example, is the chart it shows for shopping sites in Germany: It's pretty clear what point Google is trying to make there, though it seems likely that the EU Commission will quickly argue that this chart is actually unrelated to the point that it is making -- that Google may be somehow "unfairly" leveraging its dominant position in general search, to push its vertical shopping search on users. The real question, is whether or not that's harming end users in any way. That's the part that seems tough to support. There do appear to be many other options for searching. And, personally, as someone who regularly uses Google (and other search engines) for a variety of searching needs, I can say that I never use it for product/shopping search, whether or not it promotes it in its search results, because I automatically default to other specialized sites for those kinds of searches. I'm at a loss as to how Google promoting its own shopping search does any harm to me in those situations. It's just another competitor (and to me, not a very good one).

As we noted a few months ago, based on a tool that Yelp and TripAdvisor put together, there are arguments to be made that Google could do a better job with how it handles vertical search results, using its search algorithm to pull in results from others -- but it's difficult to see why anyone should want government bureaucrats determining how to build search engine results.

Filed Under: abuse, antitrust, consumers, eu, europe, monopolies, shopping search, vertical search
Companies: google

Australian ISP iiNet Says It Will Fight Against Data Retention Rules

from the if-only-other-ISPs-were-so-customer-focused dept

Last week, we wrote about some vague plans announced by Australia's Attorney General George Brandis to require data retention rules for ISPs. "Data retention" is a euphemism for mass surveillance. It requires ISPs to hold onto a ton of data and allow the government to snoop through it. Australian ISP iiNet -- a company whose willingness to stand up for its customers against Hollywood extremism we've discussed before -- has come out with a blog post in which it promises to fight back against any such data retention rules.

Unlike the typically buzzword heavy responses you normally see from overly compliant ISPs regarding government surveillance, iiNet continues its reputation of being a straightshooter and explaining what's really going on and how the company is working to protect its users.

Law enforcement agencies (like ASIO and Federal and State Police) are proposing private companies, like iiNet, should keep ongoing and very detailed records of customers’ telephone and online activity. We’re not talking targeted surveillance of individuals suspected of a crime, we’re talking about the wholesale collection and storage of data on your online, digital and telephone activity. These records are euphemistically labelled ‘metadata’ – and could include the unfiltered records of your browsing, updates, movements and phone calls, which can be readily matched to the identities in your customer account.

We don’t think this ‘police state’ approach is a good idea, so we’re fighting moves by the Australian Government to introduce legislation that would force us to collect and store your personal information.

iiNet goes even further in explaining and demonstrating graphically just how much "metadata" reveals about you. For example they show a single tweet -- and then all the "metadata" associated with that tweet to show just how much more information is often revealed in the metadata: From there, iiNet directly takes on the foolish folks who insist they have "nothing to hide."

The data collected can be incredibly sensitive – it can reveal who your friends are, where you go and what websites you visit. Indeed, it may even tell more than the content of a phone call or an email. Recent research from Stanford University showed that when analysed this data may create a revealing profile of a person’s life including medical conditions, political and religious views, friends and associations.

Police say “If you have nothing to hide, then you shouldn’t be worried”. Personally I think that if you follow that dubious logic, we’d all be walking around naked. It’s not about being worried, or wanting to ‘hide’ anything. It’s about the right to decide what you keep private and what you allow to be shared. YOU should be the one to make that call, and that decision should stick until a warrant or something similar is issued to law enforcement agencies to seize your information.

Not convinced? Then we suggest you check out the startling website based on information collected on German politician Malte Spitz by Deutsche Telekom over just six months. Zeit Online combined this geo-location data with information relating to his life as a politician, such as Twitter feeds, blog entries and websites, all of which is all freely available on the Internet. It’s really worth a look and illustrates just how informative and personally invasive metadata can be – it is truly scary stuff.

Experts in the US have some equally frightening things to say about metadata. According to NSA General Counsel Stewart Baker, “…metadata absolutely tells you everything about somebody’s life.” General Michael Hayden, former director of the NSA and the CIA, called Baker’s comment “absolutely correct,” and frighteningly asserted, “We kill people based on metadata.”

Brandis, in the past, has seemed totally impervious to people who have a different opinion than he does (even if they have the evidence on their side), so it's unclear how much good this will do. Still, it's good to see an ISP that is loudly and clearly standing up against data retention, and not hiding behind misleading language, but clearly stating what's happening and why it's bad.

Filed Under: australia, consumers, data retention, george brandis, privacy
Companies: iinet