“The Blind Eye to Privacy Law Arbitrage by Google -- Broadly Threatens Respect for Privacy”

I was just sent the Testimony of Scott Cleland, President, Precursor LLC, made before the House Energy & Commerce Subcommittee on Internet Hearing, from July 17, 2008. The hearings were entitled “What Your Broadband Provider Knows About Your Web Use: Deep Packet Inspection and Communications Laws and Policies”.

Mr. Cleland termed his testimony - or more aptly, the alternative name for the hearing he suggested, was: “The Blind Eye to Privacy Law Arbitrage by Google -- Broadly Threatens Respect for Privacy”.

There's some really fascinating and disturbing arguments presented by Cleland regarding the threat to our privacy that is posed by any company that has such all encompassing and far reaching access to so many peoples private information while simultaneously demonstrating such disinterest and antipathy towards properly protecting that same information. These facts, combined with the woeful inaction and lack of oversite by our government over Google and similar company's like Yahoo, raises all kinds of serious privacy concerns, most notable of which is identity theft.

So with that, here's his entire intro, which is about a page or so. For the entire testimony click on the title below:

Testimony of Scott Cleland: “The Blind Eye to Privacy Law Arbitrage by Google -- Broadly Threatens Respect for Privacy”

I am Scott Cleland, President of Precursor LLC, an industry research and consulting firm. I am also Chairman of NetCompetition.org, a pro-competition e-forum funded by telecom, cable and wireless broadband companies.

My testimony today reflects my own personal views and not the views of any of my clients.
The current patchwork of U.S. privacy laws, the lack of a holistic approach to Internet privacy, and selective oversight of privacy problems – have combined to create perverse incentives for some companies to: arbitrage privacy laws and push the privacy envelope. As a result, invasion/abuse of privacy is among the most serious problems users face on the Internet. The lack of a holistic, comprehensive and balanced approach to privacy law and oversight is a serious threat to American’s privacy.

Broadband companies, (telecom, wireless and cable) have long been subject to strict privacy laws (sections 222, 551 & the ECPA), which created serious consequences for the misuse of personally identifiable information without a user’s permission. Consequently, broadband companies have developed extensive policies, procedures and practices to respect users’ privacy and protect personally identifiable information. This Subcommittee’s oversight of experimentation by some, with “deep packet inspection” for advertising purposes, is entirely appropriate. Existing laws appear to cover these practices so oversight by Congress is expected.

I am concerned however, that selective oversight of only broadband privacy matters fosters a blind eye to arbitrage of privacy laws by application companies like Google, Yahoo and others. This creates perverse incentives for companies not covered by U.S. privacy laws to push the envelope on privacy to gain competitive advantage. Americans’ privacy should not be an unrestricted commodity to sell to the highest bidder or to gain competitive advantage.

Specifically, I am troubled with the selective broadband focus of this hearing, because privacy is a cross-cutting, big picture issue that knows no boundaries between the access, application and content “layers’ of the Internet. To add balance and to focus on the most serious threat to Americans’ privacy, I humbly suggest the Subcommittee hold another hearing entitled: “Why Google Knows Everything About You: Unauthorized Web Surveillance and Privacy Law Arbitrage.”

By turning a blind eye to what Google, the worst privacy offender on the Internet, is doing to systematically invade and abuse Americans’ expectation of privacy, Congress is perversely encouraging copycat behavior by “deep packet inspection” advertising entrepreneurs who see that there is a huge privacy double standard to arbitrage. Companies like NebuAd are essentially just following the privacy-arbitrage leader – Google.

To illustrate my point of the extreme privacy law arbitrage that is occurring in the U.S. marketplace today, I explain in detail in my written testimony how Google is the single worst arbitrageur of privacy laws and the single biggest threat to Americans’ privacy today.

Case Study: How Google Systematically Threatens Americans’ Privacy:

1. Google’s radical “publicacy” mission is antithetical to privacy.
2. Privacy is not a priority in Google’s culture.
3. Google gives privacy “lip service.”
4. Google threatens the privacy of more people than most any other entity.
5. Google collects/stores the most potential “blackmail-able” information.
6. Google’s track record does not inspire trust.

As others have said, information is power. Power corrupts. Absolute power corrupts absolutely. Google’s market power over private information is corrupting Google, just like former FBI Director J. Edgar Hoover was corrupted by his power and mastery of personally-sensitive information. Google’s unprecedented arbitrage of privacy law combined with its exceptional lack of accountability is fast creating this era’s privacy-invading, unaccountable equivalent: “J. Edgar Google.” Remember the timeless insight, those who don’t learn from history -- are doomed to repeat it.

i will follow this issue a lot more closely in the future. For the full testimony click here.