ICOMP

Last week the Internet Advertising Bureau (in association with ValueClick) published an interesting piece of research which sheds fresh insight into the way the British public views the relationship between its privacy and online advertising.

In perhaps its most striking revelation, the report – based on 2,000 interviews carried out by Kantar Media – declares that the majority of UK consumers (61%) believe that large parts of the internet as we know it would “disappear” without advertising, while 52% are happy to see online advertising because it enables the provision of online content and services at little or no cost to the consumer. Perhaps more predictably, the study also reveals that 6 in 10 consumers (62%) are concerned about online privacy and 89% want to control their online privacy.

Interestingly, while two thirds (67%) of interviewees claimed to be confident that they know how to protect their privacy online and half said they had deleted cookies from their computers in the last six months, of the 64% respondents who claimed to know what a cookie was, only 57% chose the correct option from a range of definitions. In other words, 39% of consumers who claimed to have deleted cookies from their computers in the past six months did so without knowing what cookies are or what they are used for. This tells us that while there is no doubt that consumers are increasingly sophisticated, they are perhaps not always presented with all the information necessary to put their values into practice.

Moreover, in positing privacy on the one hand and advertising on the other as apparently antagonistic choices in a zero-sum game, this research could be said to miss a trick. There is no doubt that advertising plays a vital role in a vibrant and healthy online marketplace but there is no reason why it must do so at the expense of a person’s privacy. In much the same way that regulators are constantly striving to find equilibrium between free speech and the protection of the individual’s reputation, so must a balance be struck here.

Online advertising and consumer privacy need not and must not be mutually exclusive.

Regards,

The ICOMP Secretariat

The privacy practices of Google have recently come under increased scrutiny. Because Google collects huge amounts of personal data through its various services, often in ways and to a degree that many users do not appreciate, this is a welcome and unsurprising development. A survey carried out by Big Brother Watch showed that not only were many users unaware of Google’s recent change in privacy policy but just 12% had actually read the new policy prior to its implementation.

Google was asked twice to postpone the introduction of its new privacy policy by the EU Article 29 Working Party, the grouping of EU data protection authorities, while they further investigated the consequences of the new privacy policy. Google declined to do so, and went ahead with the new changes as of 1 March 2012. Because of Google’s dominant position many users don’t feel they have a choice but to submit to the privacy practices whether they like them or not, or have even read them. This gives Google unprecedented access to web users’ personal data.

But Google has an ever increasing thirst for data. This explains why it enabled its Street View cars, which drove around the streets in a number of countries, to collect often very personal data from WiFi networks. This “Spy Fi” breach has been described as a “the largest privacy breach in the history across western democracies”.  Google initially claimed that no personal data had been collected, then had to admit that such data had indeed been collected, but this had been the result of actions by a single “rogue” engineer.  Now an investigation by the US Federal Communications Commission has revealed that “software was deliberately written to capture payload data”. The report states that in developing the software, privacy was identified as an issue but the responsible person at Google concluded that it was “not a significant concern”.

Google has been less than forthcoming with a full and clear explanation of what happened and European regulators and the public have been misled about the company’s data practices and its commitment to consumer privacy.  This portrays a rather frightening picture of a company with little respect for its users as well as an arrogant and uncooperative attitude towards authorities who are only trying to protect the fundamental rights of their citizens.

Europe’s data subjects have a right to a full account of one of the most egregious violations of privacy in history. One can only hope that these authorities will impose meaningful remedies that deter the company from engaging in similar conduct in the future.

Regards,

The ICOMP Secretariat

This week the Times of India reported that the Competition Commission of India (CCI) announced that it had found “prima facie evidence  that Google had abused its dominant market position by being discriminatory in allotting keywords to matrimonial site Bharatmatrimony.com”.

According to the article, the probe is to focus on AdWords – Google’s flagship advertising product and main source of revenue. In February a complaint was filed by BharatMatrimony against Google for selling keywords associated with its matchmaking sites – which include TamilMatrimony.com and BengaliMatrimony.com – to rival sites.

The Wall Street Journal also noted that the investigation “could take several months to complete” adding that it could be expanded, “to scrutinize other Google services if it sees fit”.

The announcement by the CCI marks it out as the latest in a number of regulatory bodies from around the world to begin investigating Google’s business practices. It is important regulators investigate fully and if needed halt abusive practices in order to protect  businesses and consumers and so encourage an innovative and healthy online marketplace.

Regards,

The ICOMP Secretariat

The Initiative for a Competitive Online Marketplace (ICOMP) is delighted to announce the Verband Internet Reisevertrieb e.V  (VIR) as our latest member.

The Verband Internet Reisevertrieb e.V. (VIR) is the parent association of German online travel portals and represents its members interest along several core themes such as, security on the internet, trust, transparency, and quality standards.

VIR’s chairman Michael Buller said, “The key ICOMP focal points – fair competition, intellectual property rights, data protection and transparency – are exactly in line with the issues that VIR has been promoting since its foundation”

The VIR represents the internet tourist business and also works as a point of contact for consumers, the media and the industry itself. Among its members are seven of the leading online travel portals in Germany (ebookers.de, expedia.de, holidaycheck.de, jt.de, lastminute.de, opodo.de and weg.de). VIR member companies commit themselves to maintaining the highest standards: secure online bookings, transactions and customer care. Member companies and their services are certified by the neutral TÜV, thus setting benchmarks for the entire travel industry.

Members of the VIR include: Allianz Global Assistance, Amadeus Germany, BPCS Consulting Services, CEWE COLOR, DB Vertrieb, DERTOUR, DMC Digital Media Center, FACT-Finder, FTI Touristik, GIATA, HanseMerkur, Pisano Holding, Sabre Travel Network, Sunny Cars, Traffics, Travel-IT, Travelport, TravelTainment, Travelzoo (Europe) Ltd., TrustYou, TUI interactive und @Leisure BR BV.

For further information please visit www.v-i-r.de or find the full press release in German here.

Regards,

The ICOMP Secretariat

Society has always held the view that it is the right of parents to protect their children against malicious and criminal behaviour; but is this still realistic in the era of new technologies and social networking, when children are the most IT savvy persons in a household? Is it only parents that bear the responsibility to protect their children against online dangers like cyber bullying, grooming, or child pornography? Do they need to get some help from Internet service providers (ISPs) and what is the extent to which a government can, or indeed should intervene?

Whilst social networking sites can be a useful tool in the hands of an adult, equally, they can be dangerous for inexperienced minors or teenagers, who are still forming their personalities and are unaware of the range of online dangers they could face. This is what makes the matter of their online protection a complex one, where it’s not just up to one party or the other to take effective action, but many parties working together.

This also seems to be the finding of a recent report by a UK cross-party parliamentary inquiry into how safe children are online. The report found that both the government and ISPs need to do more, as many children are easily accessing inappropriate content, even extreme pornography. Moreover, in December 2011, key players across the online industry, like ISPs and social networking sites, formed a cooperative voluntary coalition with the combined aims of introducing age-appropriate privacy settings, offering wider availability, promoting the wider use of parental controls and effective take down of child abuse material.

Just yesterday, on May 2^nd, the European Commissioner for Digital Agenda Neelie Kroes called all the member states, commissions and companies to create a good “Internet for kids”, underlining that “we need a better strategy as 75% of children are using Internet and one third of them with smartphones, without any control.” Kroes also noted that she trusts companies to self-regulate on this delicate issue, but stressed that “the Commission will take control, if this doesn’t work”.

It is clear to see then that all responsible parties are willing (or at least encouraged) to engage in the fight against cybercrime and apply solutions in order to stimulate the production of creative and educational online content and the creation of a safe environment against child abuse.  In a few words, it looks like the issue of children’s online safety is more than a simple question of Legal versus Parental Responsibility. The solution to protecting children from cyber-threats will not come only through governmental regulation against cybercrime or parental advice and education on the existing cyber dangers. This is not a question of Protection versus Education; this is not an Either Or situation.

At the end of the day, the Internet with its new ever-evolving technologies and the possibilities to connect people in so many different ways should not be something that creates fear. On the contrary, it should be a place where children can explore new possibilities, play, learn, enrich their knowledge and broaden their horizons, while trusting that they will remain safe and secure.

Regards,

The ICOMP Secretariat

There is something missing from the title of this upbeat report. The Sky Is Rising catalogues the explosion in creativity across almost every sector. More albums are being released. More books published. More films made. More photographs taken.

It goes on to trumpet the growth in consumption. We are all listening to more music, watching more films and TV, reading more books, looking at more photos. Or at least we are downloading and streaming more content.

None of this is a surprise.

For a few hundred dollars, you can buy a laptop and some software which has more power and functionality than the mixing desks in Abbey Road Studios, the Leicas of David Hockney or the typewriters of Tolkein only a few decades ago. The barriers of production and distribution have come tumbling down. It is much cheaper to produce and it is cheaper still to distribute, or rather make available to a theoretical audience of billions.

What may surprise readers is the growth in revenues from all this activity.

Books, magazines, newspapers, film, TV, music and other entertainment have made money. More than ever. $745bn – thanks to the internet.

The Sky Is Rising then jumps to conclusions. ‘Content creators…are more able to make money off of their content than ever before,’ it says. The report assumes all that money, or a large part of it, goes to those who have produced this creative explosion.

It doesn’t. Any artist could have told you that.

The new money has gone to the new intermediaries, not the artists and not to those, new and old, who invest in them.

This report’s figure for total value of entertainment is similar to the estimate by AT Kearney of the internet economy. They calculated the global internet for consumers at $732bn. They noted that, although quality content is a major driver of the internet, a typical household ‘will spend most of its internet budget on the access device and the access connection.’ Filesharing, both legal and illegal generates over half of all internet traffic but accounts for only 2% of revenues.

So who gets this new-found wealth? Not the creators who produce it. The main beneficiaries are those providing access and devices.

The internet has brought about a transfer of wealth to the new intermediaries. Under the ‘rules’ of the internet it is now possible to build a business based on other people’s content without paying anything for that content. It is even possible to profit from the widespread availability of free illegal content, through advertising based on the traffic generated. In fact, the normal ‘rules’ of business are yet to be established online.

It is hardly surprising then that the biggest companies on the internet are those based on things that are harder to steal online, such as hardware and eyeballs – Google, Apple and Amazon. At a national level, the ISPs are often the largest internet business as a result of their broadband access revenues. These companies have created very successful businesses, but in a fully competitive market, with an established value chain, you would expect those revenues to be distributed to all who create value.

Yes. The sky is rising – for the ISPs, the hardware manufacturers and the search engine(s). But for the artists and their producers and investors, the golden age has been eclipsed by planet free.

Dominic McGonigal

Chairman of C8 Associates

The recent announcement by EU Commissioner for Digital Agenda Neelie Kroes about a consultation on the Internet of Things (IoT), has fairly reflected the wish of industry, consumers and all interested stakeholders, including the European Group on Ethics in Science and New Technologies (EGE),who have been looking forward to participate in such an initiative. At the same time though, it created confusion in the mind of the ordinary observer, given the plethora of different articles revolving around the issue.

So what is this Internet of Things? The concept is simple: everyday objects such as phones, cars, household appliances or even food are wirelessly connected to the Internet through smart chips and can collect and share data. The European Commission last week opened a consultation where it invited industry, stakeholders and the public at large to express their views on the positive and negative effects that the IoT can have on economy and society, especially in areas like privacy, security, ethics and liability. As Neelie Kroes said, “I want to promote an Internet of Things that serves our economic and societal goals, while preserving security, privacy and the respect of ethical values”.

It is true that the idea of the IoT is rather alluring, if one considers that it not only supports economic growth, but also addresses societal challenges, employment, sustainability, and innovation. However, even though the IoT holds the promise of significant progress, it poses some serious threats to privacy and personal security. Through connecting all devices that one owns and where all valuable personal information is stored, the IoT can become a dangerous and intrusive tool to people’s everyday lives, routine, choices and actions in the hands of the wrong people. In other words, the more things the Internet connects, the more valuable (and therefore more appealing) it renders people’s personal data, and therefore increases the possibility for misuse and attacks on embedded systems. Or even simply raises the technical question of how people’s data will be secure if, say, there was a failure in the system.

The challenge here is to strike the right balance between allowing the Internet of Things to improve our daily lives and retaining the control over our personal life, the privacy of our own home, of our choices and in the end, of our self. The effects on our private and public space require that governments, business models, security, consumers, industry and academia get involved and debate the appropriate governance and management of the Internet of Things in the future. As with every stage of technological evolution, the future Internet of Things does have some associated risks, however with the right guidelines, users will be able to connect, trust and use it securely.

Regards,

The ICOMP Secretariat

With the Hargreaves Report still fresh in the minds of the digital community, the hornets’ nest was once again disturbed today by an article published by The Guardian on digital copyright practice.

Dominic Rushe, the author of the article, penned the argument that it was increasingly difficult to protect the digital intellectual property of artists, musicians publishers and other content creators, by boldly asserting that that “[the] established arguments for protecting the rights of content creators are almost impossible to apply to a digital world”.

The article continued to paint the picture that an ongoing battle is taking place between “15 million internet users v Hollywood”. Essentially that consumers are demanding free content and so the internet must acquiesce to these demands.  Dominic went on to say that, “A lot of what people want to do now is not legal but should be legal”, for example downloading music, or re-publishing it online as a part of a personal video.

Whilst the existing legislature may not be perfect, it does provide some sort of framework that serves to protect the livelihoods of content creators and owners from the cost of piracy. For example the photograph industry, which has traditionally been quick to embrace new technologies and indeed made the move online at a very early stage, is one of the prime victims of piracy. Speaking out as a member of the digital imaging industry, Sylvie Fodor executive director of CEPIC (federation of European picture agencies), an ICOMP member concurred, stating that “There are lots of criticisms of copyright, based on half-knowledge, if not complete disinformation, but so far I do not see any realistic alternatives.”

A direct implication, which Dominic arguable failed to address, is that without the protection that copyright and IP provides, innovation would be stifled. As Sylvie Fodor notes, “How do you reward creators if they retain no right to their copy? If only the first copy were to be paid for, it would become far too expensive for anybody to buy. The global licence, as proposed by a number of political parties, would cost a lot of money to set up, leaving little to distribute to the creators, especially if most content is to be free anyway.”

Whilst some may no longer care about the digital industry, content creators do and as Dominic Rushe noted in his article, we must certainly try to, “stop the march forward of this ridiculousness”, but by helping to better protect the work of our creative industries so they can actually make money from their rather than de-incentivising talent, which will surely happen if they are left with no other choice than to give it away for free.

Regards,

The ICOMP Secretariat

Since the appearance of FCC’s damning allegation that Google “deliberately impeded and delayed” a federal investigation, the press has been drawing some enlightening comparisons between what Silicon Valley company says and what it does. In the immediate wake of the FCC order, Google co-founder Sergey Brin appeared in an exclusive interview warning that the web freedom was now facing its gravest threat yet from, among others, the “restrictive” walled-gardens of Facebook and Apple.

The media, particularly in the UK, have not permitted this statement to go unchallenged and have, over the last couple of days, exposed the double-standards that it belies. Below are some examples:-

• Emily Bell in The Guardian’s “comment is free” section writes that Google’s “enthusiasm for openness is in direct contradiction to some of the company’s recent practices. Google has never been an “open” company: it is famously and fiercely protective of its own intellectual property in its algorithms; it routinely issues NDAs (non-disclosure agreements) to visitors to its labs and offices, and the level of control it exerts over both its own corporate destiny and the information of its users has recently caused disquiet.”
• The Guardian’s James Ball writes that “the scale of information Google has on its users is breathtaking” and that “Google’s evangelism for the power of open and linked data, while sincere and infectious, can be a risk too: its attempts to photograph every street across Europe for its Street View feature has met with opposition in many countries, and has stalled its efforts in some.” Finally he cautions that “owing to its sheer scale, Google has the ability to cause problems for the open internet – whether it intends to or not – and avoiding doing so may prove difficult.”
• Emma Barnett at The Telegraph writes that while Brin is “ completely correct to bemoan those governments, such as China, who try to control web access and digital communication by their citizens, he turns hypocrite when criticising major rivals Facebook and Apple” due to the emergence of Google+ which she characterises as Google’s own walled garden being “aggressively grown….to take out Facebook.”
• Techeye draws attention to the fact that Brin “said nothing about Google’s Search plus Your World (SPYW) feature, which mainly prioritises Google+ over other social networks, but he wouldn’t would he?”
• On a slightly different issue, Andrew Orlowski at The Register makes light of Google’s rather glib arguments against digital IP, saying: “Google fights every attempt [to attach ownership to digital things] with the response that it “breaks the internet”.

When it first emerged that Google had surreptitiously collected sensitive personal data in its quest to map neighbourhood for its Streetview service in 2010, the company claimed to have been “mortified by what happened” and pledged to institute internal control mechanisms. Nearly 2 years on, however, the United States Federal Communications Commission (FCC) is preparing to fine the internet giant $25,000 for “deliberately imped[ing] and delay[ing]” an investigation into whether its practices contravened anti-eavesdropping legislation.

In its 25 page order, the FCC explains that Google impeded the investigation “by failing to respond to requests for material information and to provide certifications and verifications of its responses” and alleges that Google “repeatedly violated commission orders to produce certain information and documents.” The order goes on to say, in rather frustrated a tone: “although a world leader in digital search capability, Google took the position that searching its employees’ e-mail ‘would be a time-consuming and burdensome task’ ” and also revealed that the company’s main architect behind the data collection project had invoked his Fifth Amendment right against self-incrimination.

All this would seem to be unusually evasive behaviour for a company which has merely made a mistake. Moreover, Google’s response to the FCC’s allegations was perhaps even more baffling. “We are pleased that they have concluded that we have complied with the law,” stated a Google representative.

Much of the coverage around this announcement has predictably centered on the apparent futility of levying a $25,000 fine on a company which announced a $2.89 billion profit in Q1 alone but this misses the point.

In September 2011, Google was fined in South Korea for impeding an antitrust investigation. In March, Google ploughed ahead with privacy policy changes against the express request of EU regulators and as recently as this month, a federal court in Australia found Google guilty of conduct that was misleading or deceptive after an appeal from the Australian Competition and Consumer Commission. Read against this backdrop, the FCC’s allegations that Google deliberately impeded a federal investigation serves as yet another demonstration of the disregard, not to say contempt, in which the company holds the concerns of regulators and, by implication, the marketplace.

Google’s bewilderingly wrong-headed response only serves to underline this impression and lead one to wonder if they even read the report. For only $25,000, the Mountain View giant may well have considered it “a time-consuming and burdensome task”.

Regards,

The ICOMP Secretariat