Google

Why Google lost the formal debate over its ethics — And a compendium of Google’s ethical lapses

November 28, 2008 | Filed Under 00Publius Contributor, Business, Democrats/Leftists, Economy/Finances, Google, Inernet, Media Bias, News, Privacy, Scott Cleland, Society/Culture, Technology, The Law | 1 Comment

-By Scott Cleland

Google effectively lost its first formal debate over whether “Google violates its own ‘Don’t Be Evil’ motto” at the Rosenkranz Foundation’s Oxford-style debate in New York City, November 18. (Transcript here)

Before the debate the audience was polled and voted 21% against Google and 48% for Google; after gathering additional insight from the debate, 47% voted against Google and 47% voted for Google. Apparently, most all of the undecideds voted against Google — that Google violated their own ‘don’t be evil’ motto.

What does this mean?

  • First, it’s a big red flag when there is a formal, high-profile and public debate about whether a corporation is living up to its own motto/ethical standard.
  • Second, this 47% post-debate vote that Google does not live up to its 90% brand favorability ratings, suggests much of the public’s good will toward Google is soft.
  • Third, as I have said many times before, the more people learn about Google the more concerned they become — facts and ‘open’ debate are not Google’s friend.
  • Fourth, Google’s ‘Don’t be evil’ motto is truly a pathetically low ethical or moral bar.

It suggests that anything less than evil is OK. As we all know, there are a host of illegal, unethical or irresponsible behaviors that are wrong for any publicly-traded corporation or ethical actor, but that fall beneath the moral bar of ‘evil.’ Moreover, if Google really meant ‘don’t be evil’ to mean ‘do good,’ why not make ‘do good’ the corporate motto?

Why use a double-negative on something so important?

Dictionary.com says: “the double negative conveys a weaker affirmative than would be conveyed by the positive adjective or adverb by itself.”

Why use the weaker form if you really mean it?

The broader question this debate highlights is whether Google behaves ethically and responsibly given the unprecedented amount of information Google controls and given the fact that the DOJ has determined Google has monopoly market power in two key Internet advertising markets.

I have been meaning to tackle the question of Google’s ethics head on.

I have also wanted to challenge Ethisphere Magazine’s methodology in ranking Google one of the most ethical companies in 2008. I will do so here.

When a more rigorous spotlight is put on Google’s ethics in practice, not in words, Google will have a difficult time staying on Ethisphere’s 2009 list of most ethical companies.

Now to THE question: Does Google behave ethically and responsibly?

First, Google has proved to be deceptive and not forthright.

Google publicly claims to respect users’ privacy, and to adequately disclose and inform consumers of what Google is doing with their private information.

However, a Consumer Reports poll (9-25-08) found that “93 percent of Americans think internet companies should always ask for permission before using personal information and 72 percent want the right to opt out when companies track their online behavior.”

Google’s words and practices clearly don’t match consumers’ expectation because Google is engaged in more unauthorized tracking of consumers than any other company — by far.

Privacy International ranked Google worst in its World Survey calling Google “hostile to privacy.”

www.ConsumerWatchdog.org recently warned Congress in a letter about the privacy and security risks in the applications Google is marketing to Capitol Hill. They also have an excellent video on how Google is harming consumers’ privacy and not farily representing what they do.

EPIC, a leading privacy watchdog, filed an FTC suit against Google alleging deceptive and unfair trade practices in the way Google handles privacy issues.

For the big picture view of Google and its pervasive disrespect for Americans’ privacy, see my testimony on privacy before the House Internet Subcommittee.

Google does not fairly represent its business or disclose its conflicts of interest. Google claims to work for users, but users pay Google nothing. Google works for advertisers, which is an undisclosed serious conflict of interest. Google’s founders foresaw and understood the conflict Google hides from users, and noted it in their Ph.D. dissertation.

“The goals of the advertising business model do not always correspond to providing quality search to users.” “…we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.”

There is also substantial evidence that Google’s undisclosed conflicts put its users at serious risk of being harmed and or defrauded. If Google honestly cares about users, why doesn’t Google bother protecting their privacy and safety, or have any customer service? Google claims to be an honest broker in running its ad auctions when it is not.

In defense of the Google-Yahoo ad partnership (that the DOJ blocked as anti-competitive), Google mis-represented their processes as “auctions,” when that is not true.

The dictionary definition of an auction is sale to the highest bidder; Google’s auctions do not award keywords to the highest bidder. In fact, they are awarded to who makes Google the most money. This non-transparent process does not allow advertisers to control their own destiny or to discover if they have been treated fairly. At a minimum, self-dealing and front-running against your clients interest is unethical, if not illegal.

Google is even deceptive in its philanthopy.

Google.org, Google’s philanthropic arm, is run as part of a for-profit division of Google itself, and not through a legally-separate not-for-profit foundation like most everyone else does. Google is deceptively creating the impression that their philanthropy is devoid of a profit motive when that is simply not true.

Second, Google has proven to avoid legitimate accountability designed to protect others.

There is substantial and mounting evidence that Google does not believe it is subject to the same rules as everyone else.

For example, One World Trust ranked Google worst in its world survey of accountability.

Another example comes from the third party firm, Audit Integrity, which ranks Google in the bottom 2% of publicly traded companies in terms of accounting and governance risk.

Yet another example is Google’s founders creation of a two-tier stock voting structure where the founders and their original investors have ten votes per share of stock to the one vote per share of stock for public shareholders. When Google’s founders had the choice to be accountable to shareholders — they refused.

As Google stated in its IPO letter to the public:

“…New investors will fully share in Google’s long-term economic future but will have little ability to influence its strategic decisions through their voting rights.”

Submitting to accountability is integral to ethical behavior, because ethics is about respect for, and accountability to, others, the law and authorities.

Third, Google’s behavior is anti-competitive.

The DOJ found Google to have monopoly market power, and found Google’s proposal to partner with Yahoo in Internet advertising to be illegal and anticompetitive.

See my detailed Googleopoly II white paper, “Google’s Predatory Playbook to Thwart Competition,” for the full discussion and documentation of Google’s extensive anti-competitive behavior which is almost by definition un-ethical.

In a nutshell it documents how Google:

  • Cartelizes most search competitors into financially-dependent ‘partnerships’;
  • Pays website traffic leaders predatory supra competitive fees to lock up traffic share;
  • Buys/co-opts any potential first-mover product/service that could make obsolete the search category’s boundaries;
  • Commoditizes search complements to neutralize potential competition; and
  • Leverages information asymmetry to create entry barriers for competitive platforms.

Fourth, Google steals. That is not ethical or responsible behavior.

Google proved in its recent book settlement with authors and publishers that “crime does indeed pay, if you have enough market power.” Google is also settling with other industries that have charged Google with theft of their property.

The independent National Legal and Policy Center has excorciated Google for its unethical disregard for others’ property. Viacom sued Google-Youtube for “a clearly illegal business model.” No less than five industries are suing Google for theft, as explained in the link in this bullet. Google also steals from its advertisers in not being responsible in fighting click fraud, because Google makes so much money from fraudulent clicks.

Click Forensics stated: “The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the YahooPublisher Network, was 27.1 percent.” That is among the highest rates of fraud in any industry.

Finally, Google’s judgement shows little ethical compass.

Just this week when Google CEO Eric Schmidt was confronted by ConsumerWatchdog.org’s John Simpson about why Google subordinated privacy concerns in its engineering designs, the answer from Mr. Schmidt was that privacy and security would slow down Google’s computational and network performance. The obvious implication is that Google cares more about increasing their picosecond computing advantage than the privacy or safety of its users. Simply, speed matters to Google more than people, privacy, safety, ethics, or responsibility.

Google for months refused to cooperate with the Senate Homeland Security Committee in pulling down al-Qaida terrorist training material that had the clear intent of endangering the lives of Americans and others. It took four long months and a 9-11 anniversary to shame Google into doing what was obviously the right thing to do.

Bottom line:

I have assembled this compendium of evidence and dozens of links to mainstream sources, to document that Google as a corporation has serious ethics problems, one which can’t be brushed under the rug.

Is Google evil? I don’t think so.

Is Google a company with high integrity and strong ethics, which routinely acts responsibly? Unfortunately the evidence overwhelmingly says no.

Many think I am too hard on Google. That’s not what the evidence says.

I trust Ethisphere Magazine will be open to the additional evidence and critique compiled here — when they come to their conclusions about which companies are the most ethical in 2009.

There is sufficient evidence compiled here to warrant Ethicsphere’s board of ethics experts to reconsider their prior conclusion that Google is one of the most ethical companies in the world. As Google has proven, more information can be a good thing.

Lastly, given that Stanford Professor Lessig attended the Rosenkranz debate and asked questions to defend Google on the question, it might be interesting to have Professor Lessig and I debate the same or a similar question in another forum.

As this post documents, there are a lot of ‘relevant’ Google ethical issues which were not discussed in the debate earlier this week in New York City.

Just a suggestion…
_________________
Scott Cleland is one of nation’s foremost techcom analysts and experts at the nexus of: capital markets, public policy and techcom industry change. He is widely-respected in industry, government, media and capital markets as a forward thinker, free market proponent, and leading authority on the future of communications. Precursor LLC is an industry research and consulting firm, specializing in the techcom sector, whose mission is to help companies anticipate change for competitive advantage. Cleland is also Chairman of NetCompetition.org, a wholly-owned subsidiary of Precursor LLC and an e-forum on Net Neutrality funded by a wide range of broadband telecom, cable and wireless companies. He previously founded The Precursor Group Inc., which Institutional Investor magazine ranked as the #1 “Best Independent” research firm in communications for two years in a row. His latest op eds can be seen at www.precursorblog.com.

Fair Use: This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. I am making such material available in my efforts to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. I believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research, educational, or satirical purposes. If you wish to use copyrighted material from this site/blog for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.


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