2013-05-19T20:49:48-04:00 Pamela Jones Harbour http://www.huffingtonpost.co.uk/author/index.php?author=pamela-jones-harbour Copyright 2008, HuffingtonPost.com, Inc. HuffingtonPost Blogger Feed for Pamela Jones Harbour Good old fashioned elbow grease. tag:www.huffingtonpost.com,2012:/theblog//3.1337744 2012-03-11T19:00:00-04:00 2012-05-11T05:12:03-04:00

Pamela Jones Harbour http://www.huffingtonpost.com/pamela-jones-harbour/
Consumers are starting to realise that the online world is all about consumer data: data about consumers' preferences, likes, dislikes, and proclivities are being utilised by a vast ecosystem of companies that are looking to target consumers with advertising (Terence Kawaja, Ecosystem of Data, (2010 video) located here). The entire user-experience and business models of the leading internet companies (e.g, Facebook, Twitter, and Google) all rely on data about users.

The vast amount of consumer data being captured online and used in various surprising ways has been the focus of the Wall Street Journal's award-winning series What They Know, which illustrates the value of data to these companies, as well as the privacy implications of using such information.

Google has been in the headlines frequently for its practices relating to consumer data, and most of these practices can be explained by Google's stated intention to "organise the world's information and make it more universally accessible and useful."

In order to organise the world's data, Google must first acquire it. Google reportedly has been collecting that data in ways that seem questionable but certainly consistent with statements demonstrating a lack of concern for user privacy. Quotes in the media such as these in the Daily Telegraph and here in Network World, illustrate the fact.

The more data points on a consumer, the more effectively advertisers can target ads - and the more Google can charge advertisers to target and deliver those ads. In my opinion, Google probably already has the most consumer data and thus can dominate and charge top dollar for its advertising services. To Google, users of its products are not consumers, they are the product. The data Google collects on you leads directly to the higher rates it charges its real customers - advertisers.

As of 1 March, Google's Privacy Policy states that personal data provided by users of almost all of its services can be co-mingled across its portfolio.

By consolidating its privacy policies, Google can now aggregate consumer data across 60 of its products and services, providing detailed 360-degree views of users' personal information, thus improving the quality of its product for advertisers. This insatiable appetite for more complete consumer data can also explain Google's continued promotion of Google+. It can also explain Google's recent conduct of placing tracking cookies on Apple Safari and IE9 devices, as well as the reported use of Android to pass data on to advertisers.

It is understandable therefore that European Data Protection Authorities are very concerned about Google's new privacy policy. They asked Google twice to delay the roll-out of its new policy so that they have time enough to determine the impact of the changes on E.U. consumers. Incredibly, Google has rejected both requests. In the E.U. in particular, Google lacks significant competitors, illustrating that dominant firms can, indeed, abuse privacy protections. This means Google has no market incentive to offer better privacy protections to consumers.

A company that is genuinely concerned about privacy protections would not ignore E.U. regulators' concerns - especially when the CNIL's preliminary analysis shows that "Google's new policy does not meet the requirements of the European Directive on Data Protection."

The world is watching this important investigation. I believe that European enforcement agencies should stand firm and apply the severest sanctions at their disposal if Google's actions are found to violate EU law. For its part, Google should think hard about listening to the wishes and concerns of the users it serves and respect their privacy.
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Pamela Jones Harbour http://www.huffingtonpost.com/pamela-jones-harbour/ Boston Globe and elsewhere evoked memories for me of tough decisions I made as a former Federal Trade Commissioner and Deputy AG in the New York State Attorney General's office. Google's proposed acquisition of ITA and potential dominance in the online travel market raises substantial questions I would ask as a former antitrust regulator.

Search engines form the gateway to the Internet, connecting consumers to information and commercial offerings, including travel. Already, 30 percent of all search engine traffic for online travel sites begins with Google. Even though most users complete their flight searches on online travel sites like Kayak and Expedia, Google's share of initial travel searches already gives it enormous sway over the $80 billion in travel purchases made online in 2009.

Most consumers have never heard of ITA, but have probably used its technology. ITA's QPX software powers the majority of online flight searches. Searching for flights is complex due to an almost endless combination of schedules, routes, availability tariffs, rules, fees and real-time information on seat pricing and availability. It took the MIT computer scientists who founded ITA nearly five years to create a commercial product. ITA licenses its proprietary technology and unique real-time access to data from the airlines on seat pricing and availability to many of the most popular online travel sites such as KAYAK, Hotwire, and Microsoft for Bing Travel.

The ITA acquisition would allow Google to collect more user data, command higher advertising rates and extract a greater share of online travel searches and search advertising. This deal would allow Google to dictate who gets a license to ITA's critical technology and strengthen Google's ability to steer search traffic in online travel. Allowing Google to acquire ITA would enable it to dominate both the front-end (search) and back-end (search advertising) of the online travel marketplace.

In light of that background, as a former regulator, I would pose several questions:

1. Google is under investigation by the European competition authority and the Texas Attorney General for allegedly altering search results to disadvantage competitive sites. How could an auditor determine that Google was not disproportionately favoring its own businesses, if the ITA deal closes?

2. What would prevent Google from using its trove of consumer information to become a data
broker to the airlines, essentially teaching airlines how to extract higher airfares from consumers by adjusting their pricing strategies? Google could combine the ITA data with the consumer data it has already collected and start offering targeted marketing campaigns to airlines: "Would you like to market your flights to Cancun to consumers making $100,000+ per year who have searched for "Mexico" and taken a trip in the last 12 months?" There have been reports of web sites already charging consumers higher prices based on past purchasing patterns, on a wide variety of goods and services (ranging from CDs to travel).

3. What would prevent Google's search advertising prices from increasing after the acquisition?
In Japan, after regulators approved the Google/Yahoo Japan deal, Google's keyword advertising rates reportedly increased by up to almost 5 times preceding amounts. Wouldn't the airlines pass along those higher costs to consumers?

4. Would the effect of Google's dominance in search and search advertising, combined with
the acquisition of ITA's unique technology and real-time access to airline data, give Google control of both the supply and demand side of travel search? Google would have access to the real-time seat availability and price information, the ability to extract higher advertising fees from airlines, the incentive to teach airlines how to discriminate among consumers, and enough consumer information to control what a consumer sees.

5. Finally, would the effect of the proposed acquisition reduce consumers' quality of information, reduce travel advertisers' choices and product variety (due to increased ad rates), and potentially diminish innovation in online travel search?

I'm no longer a regulator who can review this proposed transaction, but the world is certainly watching those who are. The government must act now to protect consumers, stop search deception and promote fair competition online.]]>