U.S. government announces Google will pay $500 million fine to settle illegal advertising charges
It looks like Google critic David Brandt was right about Google being in bed with rogue online pharmacies. Here’s the Department of Justice:
Online search engine Google Inc. has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the United States, announced Deputy Attorney General James M. Cole; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; and Kathleen Martin-Weis, Acting Director of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA/OCI). The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.
As part of the settlement, Google also agreed to an admission of wrongdoing.
It looks like justice has been served. This is a pretty steep fine. Obviously, DoJ investigators were able to find strong evidence that Google was flagrantly breaking the law, or Google wouldn’t have settled the charges. The cost of the settlement has already decreased Google’s quarterly profit by 22%, after the company set aside the money it anticipated having to pay the feds.
“This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google’s knowledge and assistance, into the United States, directly to U.S. consumers,” said U.S. Attorney Neronha. “It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. consumers, by compelling Google to change its behavior. It is about holding Google responsible for its conduct by imposing a $500 million forfeiture, the kind of forfeiture that will not only get Google’s attention, but the attention of all those who contribute to America’s pill problem.”
LGB applauds the United States government for holding Google accountable in this case. Perhaps this investigation will cause the Monster of Mountain View to think twice before breaking the law in the future.
Google issued a short, meek statement on the settlement and then refused to comment further. The statement read:
We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago… However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.
It actually took Google years to get around to banning rogue online pharmacy ads. Google’s competitors took such actions back in 2003, but Google did not follow suit. Instead, it behaved unethically and illegally. Now it will pay the price.
FTC on the verge of launching a major antitrust investigation of Google
Since April when Bloomberg News reported that the Federal Trade Commission was contemplating a full-blown antitrust investigation of Google, people who follow the Internet giant have been waiting for the other shoe to drop.
It did on Thursday with the report in the Wall Street Journal that the five-member Commission is about to serve Google with civil subpoenas — known as Civil Investigative Demands — about its business practices.
The European Union and the State of Texas are already investigating, but word of the FTC probe raises the issue to a new level of intensity. It also makes it clear that millions of dollars spent on lobbying and the hobnobbing by Google executives at White House State Dinners will not prevent a long needed investigation.
This investigation should have been launched years ago. The FTC has been missing in action for some time, but better late than never. There are, of course, tech pundits out there mocking this announcement, suggesting that Google won’t be nearly as powerful as it is now by the time this investigation has been completed. Many have cited Microsoft as an example.
But part of the reason Microsoft’s influence diminished is precisely because of the antitrust probe and subsequent antitrust lawsuit. The very existence of this probe should serve as a check on Google’s power, and that is a very good thing.
Consumer Watchdog is asking the White House to keep its distance and not meddle with the investigation and other existing (but smaller) probes of Google’s business practices that are already going on.
Class action lawsuit filed against Google over Android tracking
Following a class-action suit brought by two Tampa men targeting Apple over alleged user tracking, Google is facing a similar class action lawsuit filed in Detroit on Wednesday.
The plaintiffs in the Detroit suit evidently have a case of buyer’s remorse.
Last week developers also revealed that Android devices keep a similar cache of cell tower and WiFi data, though Android limits the amount of data to 50 recently accessed cell towers and 200 recently accessed WiFi networks. Like iOS devices, a person would need to “root” (similar to “jailbreaking”) an Android device to get the data, but in contrast to iPhones this data isn’t synced to a computer.
More disconcerting, however, is the fact that Android devices collect “its location every few seconds and transmitted the data to Google at least several times an hour,” according to research by security expert Samy Kamkar. Google said it uses this data for a variety of uses, but unlike Apple, Android attaches a unique ID number to the data. While that ID number is effectively random and can’t be directly linked to a particular device or user, it is possible to analyze such data and correlate it to particular individuals using increasingly advanced “deanonymization” techniques.
Variety of uses, ha. That’s basically Google’s polite way of saying, we’re invading your privacy to monetize you because that’s the business model we think will make us billions.
Google is correct in one sense: People who are using Android are effectively “opting in” to Google’s surveillance regime. But the thing is, Google is not being upfront with people who are purchasing Android phones about the existence of the regime. Furthermore, what goes on inside of Google’s datacenters is a secret, so it’s hard to expose what Google is really up to.
Google claims to love open source. The reality is, Google only loves open source to the extent it can subjugate free software to expand its empire. Android and Chromium are just means to an end – the end being the ability to track millions of people.
Google does have several initiatives aimed at supporting open source projects, like Google Summer of Code. But Google’s business practices and policies are anything but open source. Google is a proprietary software company just like Apple or Microsoft.
The only difference is that Google is much, much better at being disarming towards people who support free software. (Microsoft has noticed this; it’s starting to copy Google’s tactics).
Just like Google Chrome, Android phones are loaded with proprietary spyware that phones home to Big Brother. Big surprise? Not to LGB, but not everyone scrutinizes Google as we do. Not everyone has the healthy skepticism that they should.
As of today, two concerned women from Detroit have joined the ranks of the skeptics. Good for them.
The initial pleadings are available from Archive.org in PDF format: Brown et al v. Google, Case #2:11-cv-11867.
Europe initiates antitrust investigation of Google
The Monster of Mountain View’s monopolistic practices are finally drawing a response:
The top European antitrust regulator opened an investigation into Google on Tuesday to examine allegations that the Internet giant has abused its dominance in online search.
The decision follows complaints by specialized search-related companies about “unfavorable treatment of their services in Google’s unpaid and sponsored search results,” the European Commission said in a statement.
The commission said it was also looking into whether Google might have given its own services “preferential placement” in search results. In addition to its search engine, Google has a growing number of other online businesses, including mapping, translation, video and electronic commerce services, many of which, like the search engine, are supported by advertising.
Google’s tendency to give its own services preferential placement in search results appears to be an internal policy. It’s already been well-documented by critics. From Google’s perspective, cross promotion makes a world of sense. The growth of Google’s spyware-laden browser, Chrome, has been mostly driven by Google’s own Internet properties, including YouTube and Blogger, where users are encouraged daily to try Chrome. Most people who download Chrome have absolutely no idea what the implications are for their privacy and security.
Aggressive cross-promotion is also what got Microsoft in trouble years and years ago. Microsoft used its Windows operating system to destroy the market for Netscape Navigator, by giving Internet Explorer away for free and then bundling it into Windows as the default browser. Microsoft managed to survive its own antitrust investigation, but the legal battle and other circumstances took a toll on Microsoft’s stock, which is still limping along nearly a decade later.
