Google Privacy Policy Change: FairSearch Consultant Sends Letter To Attorneys General Expressing Concerns

As you are aware, Google holds over 79% of the online search market in the United States and upwards of 95% in other countries around the world, meaning that Google’s privacy policy is a de facto national, if not global, privacy policy. As a result of Google’s dominant market share and monopoly power, consumers are effectively deprived of choices. The letter noted, “[i]t rings hollow to call their ability to exit the Google products ecosystem a ‘choice’ in an Internet economy where the clear majority of all Internet users use – and frequently rely on – at least one Google product on a regular basis.” Bert Foer, president of the American Antitrust Institute, was recently quoted in a Washington Post story about the “lock-in” effect of Google’s products and privacy policy shift as saying, “[i]t’s sort of the story of how you boil a frog in lukewarm water. Google may be capturing its consumers in the same way so that consumers don’t understand what is happening until they are cooked.”

The coalition I represent, FairSearch.org, is focused on promoting healthy competition rather than taking a position on privacy issues, but we believe that the new privacy policy, as well as recent controversies like the implementation of Google’s “Search Plus Your World,” and the circumvention of privacy settings on Apple’s Safari web browser, are symptomatic of a broader problem in the internet ecosystem.

In an ecosystem in which competition has been impeded by the actions of a dominant company, that company has the ability and the incentive to impose policies such as the one in question on a consumer base that has little, if any, choice in the matter. Google’s own chief economist Hal Varian observed in 1998 paper that “once you have a chosen technology, or a format for keeping information, switching can be expensive.”

Google’s actions demonstrate a disregard for government authorities, as well as the hubris that is attendant upon a company that possesses monopoly power. As Federal Trade Commission Chairman Jon Liebowitz recently said with regard to Google’s privacy policy change, “[i]t’s a fairly binary and somewhat brutal choice that they are giving consumers. I think I can’t say much more. But we’re aware.”

Authorities around the globe, including the Directorate General for Competition in the European Union, the Federal Trade Commission, as well as several Attorneys General are already investigating Google for abusing its dominant position. We will soon be gathering in Washington, DC at the NAAG Spring Meeting, where policymakers and law enforcement officials from authorities around the country will come to discuss this and other important issues. As the lead antitrust enforcer in your state, I urge you to speak with your colleagues and the federal officials who are investigating Google’s dominance to make your concerns known and to contribute your expertise to this critical issue that affects almost every Internet user in your state.

As always, I am available should you have any questions for me or any of FairSearch.org’s members, and I look forward to seeing you at the upcoming AG events.