Posts Tagged ‘google drugs’

Forty State Attorneys General File Amicus In Support of Mississippi Attorney General Jim Hood’s Fight Against Google

June 30, 2015 Comments off

MTP readers will recall that Google sued Mississippi’s populist Attorney General Jim Hood to stop Hood’s investigation into Google’s drug habits.

More on this to come, but the short history of the case is that Hood served a request for documents on Google consisting of a series of questions about Google’s business practices in furtherance of Hood’s investigation into a number of issues, mostly whether Google had violated the nonprosecution agreement Google entered into with the Criminal Division of the U.S. Department of Justice that allowed Google to pay $500,000,000 to avoid being prosecuted–and having its senior executives including Larry Page prosecuted–for violating the Controlled Substances Act.

Hood’s concern was that Google not only violated the terms of the nonprosecution agreement but also may have violated a variety of Mississippi consumer protection laws for advertising illegal drugs in Mississippi.

Let’s be clear–people die from buying illegal drugs online. That’s why we have the Ryan Haight Act carried by Senator Diane Feinstein–a senator from California.

The overwhelming majority of the questions in Hood’s request concerned Google’s compliance.  Google promptly sued Hood to stop the investigation.  As luck would have it, the case was heard in federal court before a judge who is apparently Hood’s long time political opponent.  Google was able to delay Hood’s investigation while Hood appealed to the Fifth Circuit, where the case is now.

The AGs summarize the fundamental flaw with Google’s case:

This is a case about the authority of state Attorneys General to exercise one of their fundamental powers: the ability to investigate potential violations of state law. What should be a routine discovery dispute in Mississippi state courts, resolved under established state procedures, has instead evolved into a contrivance for a company doing business in the state of Mississippi to invoke federal jurisdiction by asserting potential affirmative defenses to claims that have never been filed.

Imagine if the tobacco companies had done the same to Hood’s predecessor and mentor former Mississippi Attorney General Mike Moore to avoid what became a multibillion dollar multistate settlement against Big Tobacco?  Remember that one?

So it should be no surprise that forty–count ’em, forty–state Attorneys General filed an amicus brief supporting Hood’s ability to conduct his investigation while affording Google full due process rights to object or otherwise defend itself.  As the forty AGs noted, doing otherwise “would provide a roadmap for any potential wrongdoer subject to a legitimate state law enforcement investigation to attempt to thwart such an inquiry.”  I wonder what the other 10 are thinking?

I know what these guys are thinking?

And remember–smoking doesn’t cause cancer.

Read the brief here.

Straight Out of Rosedale: Mississippi’s Sudden Interest in Limiting State Lawsuits While Google Sues Attorney General Jim Hood

February 8, 2015 3 comments

You can’t make this stuff up.  It reads like a subplot of a John Grisham novel with that vague warning that it could swing back across the stage as a plot twist in the third act to smash into the ending with a vengeance, carrying streaming guidons reading  “Here am I, the one true ending, send me.”   A single bugle sputtering a few bars of Garry Owen in the darkest gloom of dawn at Vicksburg.  The General, perhaps.

In a strange twist of fate worthy of Robert Johnson at the crossroads, a number of events transpired in recent weeks involving Mississippi State Attorney General Jim Hood who is being sued by Google for having the audacity to investigate a variety of potentially unsavory business practices having to do with sex, drugs and yes, rock and roll.

The timeline on this is that Hood served Google with a subpoena last October 21 asking for documents relating to Google’s business practices–what Google itself does–mostly involving how the company handles human trafficking, advertiser fraud and why the Google stockholder settlement over the $500,000,000 forfeiture Google paid the United States has a section that addresses how Google provides golden parachute terminations for employees convicted of felonies under state and federal law.  And also a few questions regarding the hundreds of millions of DMCA notices that Google receives for copyright infringement.

Then there was the Sony hack, and thanks to North Korea some stolen documents circulated on the Internet including some confidential emails from the MPAA.  You have to live under a rock not to know the rest of those facts.  And–shocker–people in the business of producing movies don’t like Google much.  According to Google, somehow the stolen documents show that MPAA is involved with helping the state develop a case against Google.

Google then sues Hood in federal court in Mississippi and tries to somehow transform Hood’s investigation from a case about Google’s business practices and compliance (with Google’s non-prosecution agreement with the Criminal Division of the Department of Justice) into a case about infringing materials on Google’s various platforms–all essentially based on the documents stolen courtesy of North Korea.  And Google wants you to believe that somehow there’s a SOPA angle about all this–a stretch that didn’t impress many people not on the Google payroll.  As Congressman Issa said, if there’s a scandal here at all, it’s that years after SOPA, there’s still the same problem that SOPA was trying to solve however inartfully.

Google is trying to get an injunction to stop Hood’s investigation.  Hood’s brought no case as yet and has only asked Google to respond to his subpoena.  Google probably has dozens of open subpoenas around the world, so this is nothing new.  Google could very easily respond to the subpoena and reject the lines of questioning its lawyers think are inappropriate or wrong–essentially the same work that went into asking for an injunction.  But they wanted a court–a federal judge–to order a state law enforcement officer to stop the investigation into violations of state law.

Of course, the federal judge denied Google’s request but asked the parties to brief their positions, which they did.  And here’s where it gets weird.

First, Google filed its response to Hood and a handful of the trade associations and lobby shops the company funds filed “friend of the court” responses as well.  This on February 2.  Vox Indie has a great post describing the various funding relationships between Google and the “amici”.  (UPDATE:  Mike Godwin wrote an op-ed in the Clarion-Ledger–Godwin not only works of the R Street Institute (funded by Google) but was formerly at Public Knowledge (funded by Google), the Center for Democracy and Technology (funded by Google) and the Electronic Frontier Foundation (funded by Google).  He also attended Lamar High School in Houston, go Redskins!)

On January 19, a Mississippi state legislator introduced Mississippi House Bill 1201–legislation that would limit the Mississippi attorney general’s ability to sue on behalf of the state for any reason.  Such as a potential lawsuit against or criminal prosecution of Google.

On February 3, Hood was in Washington, DC to announce a settlement of claims against Standard & Poors for doing something that sounded a lot like cooking the credit ratings of companies that were involved in the 2008 mortgage scandals.  Hood was a leader in the several states in the suit against S&P.

According to the Associated Press:

Attorney General Jim Hood says in a news release that Mississippi sued S&P in 2011, joining with Connecticut, the first State to sue in 2010. By 2013, the Justice Department and 17 other states filed similar lawsuits against S&P.

Standard & Poor’s is paying about $1.38 billion in the settlement announced Tuesday over ratings issued from 2004 through 2007.

Hood says the credit rating agencies were just as culpable as the investment banks in causing the financial crisis. Hood says the credit rating agencies held themselves out to be objective and independent.

Oh, and how much was the settlement again?  That’s $1.38 billion with a B.  But let’s limit the state AG’s ability to go after bad guys.

What happened with Mississippi House Bill 1201?  It passed out of committee:

A House judiciary committee passed a bill today that would require the state attorney general to gain approval from an oversight committee of the governor, lieutenant governor and secretary of state to file any lawsuit on behalf of the state for more than $250,000.

State Rep. Ed Blackmon Jr., a member of the House Judiciary A Committee, called the measure partisan politics. He voted against it.

House Bill 1201 was filed by the chairman of the committee, state Rep. Mark Baker, R-Brandon, who has been discussed as a potential candidate for attorney general this year.  [Mr. Baker was also the Republican Leader of the Mississippi House Republican Conference from 2008 to 2012 according to his official biography.]

State Attorney General Jim Hood, the lone statewide Democratic official, has been criticized by some Republicans for hiring outside attorneys to represent the state in litigation, but at the same time, through litigation, Hood’s office is responsible for bringing hundreds of million dollars into the state treasury.

And then on February 5, Bill 1201 failed to pass the Mississippi House:

Mississippi House members are rejecting new restrictions against Attorney General Jim Hood’s ability to file lawsuits or hire outside lawyers.

The House voted 66-49 Wednesday to reject a House Bill 1201, which would require the governor, lieutenant governor and secretary of state to approve the attorney general’s filing of any lawsuit in which the state could win more than $250,000. House Judiciary A Committee Chairman Mark Baker, R-Brandon, could bring the bill back up for more debate….Baker said Hood’s unfettered ability to bring lawsuits is improperly setting state policy, negatively affecting Mississippi, and robbing those who are sued.

Hood and supporters say House Bill 1201 would put unconstitutional restrictions on the attorney general’s power….

“This may be the most rancid, politically motivated bill I’ve seen before this Legislature,” said Rep. Steve Holland, D-Plantersville.  

Lawsuits by attorneys general have been a long-festering issue in Mississippi politics, running back to when Hood’s predecessor, Democratic Attorney General Mike Moore, sued the tobacco industry in the mid-1990s, arousing the ire of Republican Gov. Kirk Fordice even as Moore won millions for the state. [$4.1 billion, actually.]

Republican Gov. Haley Barbour — who was a tobacco lobbyist in Washington during Mississippi’s lawsuit against the industry — used the tobacco money to help prop up the state budget during the recession. The payments from the tobacco lawsuit settlement are still being spent under the current Republican governor, Phil Bryant.

So all in all, a pretty good week for Jim Hood.  Bizarre, but good in the end.  This is particularly true when you consider that there are potentially dozens of additional state attorneys general who are also investigating Google and also that Mike Moore is evidently advising Hood.  This would make sense if, like the tobacco litigation and the S&P litigation, Mississippi is joining with other states to pursue Google. Moore was the first state attorney general to sue the tobacco companies, resulting in a $236 billion settlement, of which $4.1 billion went to Mississippi.  (Google is no stranger to multistate litigation–it settled a privacy case with 37 states in 2013.)  Oh, and Mike Moore got a part in a Hollywood movie.

Don’t watch The Insider on a dark and stormy night.  Let’s just say it’s not The Internship.

As Andrew Orlowski wrote in The Register:

Google’s success in “assassinating” a democratically-elected legal opponent last week raises troubling questions about corporate power and accountability. The feisty attorney for the USA’s poorest state is now trying to make peace, after being on the receiving end of a highly unusual lawsuit from Google.

Even if you will have no truck with the Hollywood lobbying machine, you should know the facts. A global corporation which is expected to bank $60bn in revenue this year and which is worth $382bn, has silenced an elected prosecutor.

Google’s income is 30 times that of the General Fund in Mississippi; its market valuation is four times the entire state’s GDP. What did Jim Hood do to make himself Google’s enemy?

Based on Hood’s response to Google’s attempt to stop his investigation, I’m not so sure that he’s giving into “rancid” tactics.  But ask yourself this:  If this were Big Tobacco going after former Mississippi Attorney General Mike Moore, how would you feel about Google’s tactic?

Or Enron?

Or Drexel Burnham Lambert?

So why should Google be special?

UPDATE:  Judge Wingate–evidently Hood’s long-time political enemy–ruled against Hood.  The case is currently on appeal to the U.S. 5th Circuit Court of Appeals.  This should not prevent Hood from pursuing state law claims against Google or anyone else.

Corporate Astroturf and Manipulation of Media Messages by @SharylAttkisson at TEDxUniversityofNevada

February 7, 2015 Comments off


Uncle Sugar Shows Us a Regular Guy on a Lobbying Trip

As we enter the a new session of Congress, we can anticipate being assaulted by the combined forces of Google, Facebook, Pandora and SiriusXM, the Electronic Frontier Foundation, Public Knowledge, the Digital Media Association, the Computer & Communications Industry Association and its host of “studies”, the Cato Institute, the Heritage Foundation, the Stanford Institute for Internet and Society, the Berkman Center, the Consumer Electronics Association, the Internet Association and of course, the National Association of Broadcasters.

What’s different about the current state of play for artists, songwriters, producers is that our side really doesn’t have anything like the complex and systematized network of 501(c)(3)s, cy pres awards, special interest groups and academics that are on Google’s payroll and increasingly on the payroll of Facebook and the new Internet Association (which itself spends approximately $400,000 a quarter on lobbying alone).

I highly recommend you read this article by Tom Hamburger and Matea Gold from the Washington Post, “Google, once disdainful of lobbying, now a master of Washington influence.”  You’ll begin to get the idea that Google spends so much money on “astroturf and manipulation of media messages” that it had to start finding ways to create other ways to spend the money.  Hamburger and Gold lead their reporting with this example:

In May 2012, the law school at George Mason University hosted a forum billed as a “vibrant discussion” about Internet search competition. Many of the major players in the field were there — regulators from the Federal Trade Commission, federal and state prosecutors, top congressional staffers.

What the guests had not been told was that the day-long academic conference was in large part the work of Google, which maneuvered behind the scenes with GMU’s Law & Economics Center to put on the event. At the time, the company was under FTC investigation over concerns about the dominance of its famed search engine, a case that threatened Google’s core business.

Indeed, this manipulation has gotten so bad, the judge in Oracle v. Google required the parties to make court filings listing all the public commenters on the case which has come to be called the “Google Shill List” which you can read here.  The Trichordist has an excellent “connect the dots” post showing Google’s history of financing those filing “friends of the court” briefs in Google’s efforts to stop Mississippi Attorney General Jim Hood’s investigation into Google’s violation of various laws.  All this in the aid of what the EFF might call “obfuscation”–Google and its “amici” would have you believe that Hood’s case is just about the acts of people using Google or its products, for which Google has a variety of statutory protections.  Nothing to see here, move along.

But as Hood points out, the four-year sting operation run against Google by a combination of federal agencies before a federal grand jury in Rhode Island showed that Google and its senior management team right up to Google’s CEO Larry Page was complicit in violating the Controlled Substances Act to the point of helping the bad guys get around Google’s own filters.  Google paid a $500,000,000 forfeiture for those drug violations for advertising the sale of prescription drugs–not for what the advertisers did, but for what Google did.

Sorting through more than four million documents, prosecutors found internal emails and documents that, they say, show Mr. Page was aware of the allegedly illicit ad sales. Under this week’s $500 million settlement, those emails won’t be released, avoiding the possibility of disclosure at trial.

“Larry Page knew what was going on,” Peter Neronha, the Rhode Island U.S. Attorney who led the probe, said in an interview. “We know it from the investigation. We simply know it from the documents we reviewed, witnesses that we interviewed, that Larry Page knew what was going on.”

Subsequently, Google’s lawyer said in open court that the Department of Justice apologized to Google for the statement by Mr. Neronha (Transcript of hearing at pp 11-12):

“The U.S. attorney in Rhode Island went off the reservation and gave a long interview about all the evidence and why it was he was so excited about the case,” lawyer Boris Feldman told the judge at a Delaware state court. “It ended up being so far off the reservation that the Justice Department apologized to Google for it and muzzled him.” (emphasis mine)

So when Hood served his subpoena, you could easily imagine Larry Page telling Google’s lawyers to MAKE IT STOP!  I’M RICH, I’M ENTITLED, HE CAN’T DO THIS TO ME!


Because, the U.S. Attorney for Rhode Island told the Wall Street Journal that Page was implicated.  Google is now settling shareholder class action cases against Larry Page and the Google senior management team and board members alleging that Page is implicated.  There is a potential for a host of criminal violations at the State and federal level from consumer fraud, to RICO, to Sarbanes Oxley.  And the best Google can come up with for friends of the Court are the usual suspects and trade groups?  When the federal Justice Department is issuing apologies to multinational corporations, it’s left to state law enforcement officials to seek justice.

Just like the copyright battle in the Congress yet to come this year, Attorney General Hood’s investigation is a significant upping of the ante in these cases.  Hood’s case is one of the few times that an American multinational corporation tried to muzzle a criminal investigation into its own practices before it ever started.

And that’s worth bringing to bear a whole lot of astroturf just the copyright law–that in Google’s case presents a host of loopholes on which it’s built its business.

As the Trichordist points out, the venerable public interest watchdog “Public Citizen has released a study called Mission Creepy a great guide to Google’s labyrinthine influence buying.”  Even if you skim that report, I think you’ll agree we haven’t seen as comprehensive a takeover of the federal government, tax exempt organizations and the academy since the days of John D. Rockefeller, maybe not ever.  No wonder the Department of Justice is apologizing to Google.

But it’s not just controlling government officials that’s the problem.  It’s the combined work product of all this influence buying that is truly insidious.

How does this work?  This video by award wining investigative journalist Sharyl Attkisson is an excellent discussion by the former CBS news reporter about the new media world we live in.  Ms. Attkisson uses the example of pharmaceutical companies doing a variety of things like manipulating search results and controlling Wikipedia.  Ahem….

Here is a link to the Columbia Journalism Review article that Ms. Attkisson references:  Bitter Pill: How the press helps push deadly prescription drugs, sometimes with deadly consequences.

Finally, a Google Whistleblower, Part 1

May 1, 2014 3 comments

Americans are freedom loving people, and nothing says freedom like getting away with it.

From A Long Long Time by Guy Forsyth

The thing about public relations is that it works.  When famous personalities or executives have very carefully cultivated public images, large numbers of people come to be emotionally invested in them, a kind of mass hysteria.  Rarely does anyone criticize them in any sustained way.  Such a critic would have to be willing to withstand a lot of abuse and most people just aren’t cut out for that.

For a prosecutor to be able to even open an investigation into such people takes a lot of juice.  And that prosecutor had better be able to make their case successfully because such people will fight to the bitter end.  As they should.  But in some cases, their fight will not only be in the courtroom, not only in the press, but will also be inside the very agency that was created to protect the public from the behavior being prosecuted.  And they’ll try to rid themselves of this meddlesome and over zealous prosecutor.  How many times have you heard that one?

One thing all such people have in common is that very few fans would have ever believed the celeb did the thing for which they went to prison because of the PR image that these defendants created for themselves.  This is why we have trials.  Sometimes their very existence is about image and advertising, controlling their messaging through the mass media.  Often the only way to square the reality of their bad behavior and the image they’ve created seems so simple.

They lie.

And the arrogance that made them think they could get away with the bad behavior in the first place makes lying seem like the right thing to do.  Why?  Because they have always made the lies stick, they have always slid it past the public, they have always deceived the government into looking the other way, they have deceived their customers, or even just the fans.  They have sometimes threatened whistleblowers with who knows what rough justice.

Because nothing says freedom like getting away with it.

If you asked around suburbia in 1999 about when Martha Stewart would go to prison, you would have been laughed out of the room.

If you had told Wall Street types in 1997 that in a few years time Enron would be bankrupt and most of its senior executive team would be in prison, you would have been laughed out of the room.  Because Enron was untouchable and politically connected.

If you had told a room full of MBAs in 1985 that in a few years time, Michael Milken would be in prison and Drexel Burnham Lambert would be bankrupt–laughed out of the room.

And at the end of the day, these people just broke the rules of the markets.  They did it to a greater or lesser degree–and they lied about it. They made a little money under the table.  OK, a lot of money.  But here’s what they did not do.

They didn’t promote the sale of drugs to kids, they didn’t distribute sex trafficking apps, they didn’t create a government within a government.  They didn’t run a network of academic assets, bloggers, and probably journalists to further their interests.  They didn’t host celebratory meetings for themselves inside the White House promoting their big concerns about drugs at the same time that they were negotiating the biggest corporate fine in history for promoting the indiscriminate sale of illegal drugs.  They didn’t use cy pres awards in highly suspect class action rulings to fund many of their shills.  They didn’t loan their employees to political campaigns and they didn’t shape search results to further their own interests.  They didn’t park their jets at a NASA airfield, either.

They didn’t get caught selling advertising for counterfeit Olympics tickets and tell the world that they intended to keep the money.

But one thing that Enron and Drexel have in common with Google is that they both developed incredibly complex financial instruments.  Enron called them derivatives, Drexel called them junk bonds.  Google calls it Adsense.  There are aspects of Adsense that are very complex and they even use a trading desk system that is very similar to derivatives trading.  And just like derivatives trading it is largely off the books and almost entirely in the control of Google one way or another.

You could call that a “lack of transparency,” but that sounds like PR spin, too.  Here’s what it is–dark, hidden and I believe fraudulent.  It’s very complex, in fact it’s so complex that only Google really has all the information to know what’s going on.  As David Lowery said, complexity is very often fraud.

adexchangesHere’s another difference between Google and their predecessors:

The advertising being sold–fraudulently, I believe–involves every Fortune 500 company.  It involves mom and pop stores, small to medium sized businesses who rely on Google for advertising their companies.  So there are a lot of people who want to believe that they have not been had.  That they have not screwed up.  Who don’t want to have to explain to their bosses what in the world they were thinking to trust these guys at Google.  Because when this all unravels, it’s going to seem obvious.

You may be one of these people who are bought into the Google reality, there are a lot of them.  So when you hear this story, just remember to check your carefully crafted impression of Google and its executive team at the door.  They want you to believe.  You know, “don’t be evil” and all.

But just imagine for a moment what would happen if they were lying.  Bigger lies than Martha, Ken and Michael.  Far bigger.  Perhaps even lying to you personally.  What if Google was corrupt to its core?

What if they were?

Where Did the Money Go?

Google released a report about the measures it takes against piracy online (just in case 20 million DMCA notices a month received by Google isn’t enough to tip you off that there’s something rotten in Mountain View).  In the report was this line:

Google Piracy Ad CancellationThis was the first time I saw Google acknowledge terminating a specific number of Adsense accounts.  Two things caught my eye about this statement.  First, the cumbersome wording.  “Google disabled ad serving to 46,000 accounts”.  That’s a forward looking phrase that does not deal with the status of the account.  Wouldn’t you have more naturally said, “Google terminated 46,000 Adsense accounts”?

But the main thing that I thought was important about this sentence is that it does not state what happened to the money.  And if you’ve followed Google for any length of time regarding its complex world of copyright infringement that profits it so well, you know that Google is all about following the money.

Instead of following the money down the rabbit hole of the complex advertising system that only Google can observe in its entirety, let’s just go back one step.  If Google cancelled 46,000 Adsense accounts, where did the money go?

This report was released in September 2013.  On March 13, 2014, Katherine Oyama, a Google lawyer, testified to the House IP Subcommittee that Google had terminated even more Adsense accounts:

Oyama Testimony

So we know that Google has admitted terminating 46,000 accounts during 2012 and nearly double that number after 2012, presumably between January 1, 2013 and March 13, 2014 or thereabouts.

As I noted in my briefing to the USC Institute on Entertainment Law and Business in 2013, no one has asked how much money was involved in cancelling these accounts or where it went when the accounts were cancelled.

If these accounts were all in the long tail, there might have been a minimal amount of money involved.  But if these accounts had earned say $5,000 each on average, that would be a payment of $230,000,000 that went somewhere.  And $10,000 each would obviously have been double–$460,000,000.

The same calculation for the 73,000 sites would result in $365,000,000 for a total of $595,000,000 at the $5,000 rate and $730,000,000 at the $10,000 rate for a total of $1,190,000,000.

And that’s real money.  Let’s also point out that when a company like Google says they have “ejected more than 73,000 sites” there’s no telling what the number actually is, other than that it is more than 73,000.

I have heard for years that Google has a practice of terminating Adsense accounts and keeping the money.  In fact, I have heard the practice referred to as “part of Google’s business model.”  Even I did not take that literally.

Google is being sued for this very thing by SMS Telecom which alleges:

SMS Telecom

So why did I choose the $5,000 and $10,000 thresholds?  Partly because $5,000 and $10,000 is not enough for most people to sue over.  It is very unlikely that anyone will make a real stink over losing that account–particularly if the people getting cancelled don’t know about each other.  Partly because it illustrates that based on Google’s own disclosures, this could be significant amounts of money even at relatively low levels on a per cancellation basis.

It’s the kind of thing that could certainly help a quarterly financial result or revenue target–and of course, it’s all reportable income, so it must be somehow reflected on Google’s Sarbanes-Oxley compliant accounting statements, right?  Who’s their public accountants again?  Arthur Anderson?

But I chose these thresholds for another reason–these are the thresholds that an apparent Google whistleblower has identified in a startling post on Pastebin, that Google of course denied.  The Pastebin whistleblower posted a Wikileaks-worthy follow up threatening to name names and reveal documents.  She–I suppose a she–was quite clear that she feared Google.  Why?

The Wall Street Journal may have an answer to this question based on a statement made by Google’s lawyer Boris Feldman in open court (“Did DOJ Apologize to Google for US Attorney’s Comments?”):

“The U.S. attorney in Rhode Island went off the reservation and gave a long interview about all the evidence [a reference to the 4,000,000 documents that Google produced in the grand jury proceeding] and why it was he was so excited about the case,” lawyer Boris Feldman told the judge at a Delaware state court. “It ended up being so far off the reservation that the Justice Department apologized to Google for it and muzzled him.”

So when the U.S. Department of Justice apologizes to a defendant who paid what was then the biggest fine in history for violations of the Controlled Substances Act, why would a mere employee ever feel exposed?

Continued in Part 2


Daddy’s Home for Google Drugs: “Once they know you had the money to spend, they let you advertise”

July 1, 2012 Comments off

An eye popping Associated Press interview with the Man Who Got Google, David Whitaker.  This is a must read, as is his further accounts on his website.  Here’s a couple examples from the AP article:

Whitaker credits AdWords with helping the business take off. He recalls talking with a Google representative in Buenos Aires, Argentina, about the anti-aging, bodybuilding and weight-loss products the site was selling.

“She did not hesitate at all and wanted to start advertising it right away,” said Whitaker, reading from a written account of his time in Mexico. He said he deposited $30,000 to start.

“Once they know you had the money to spend, they let you advertise,” Whitaker said.

This will all sound familiar to anyone who read the Wall Street Journal coverage of the EasyDownloadCenterer case.  Here’s another:

Whitaker said the first site looked like the handiwork of a Mexican drug lord trading in HGH and steroids. But after a few rejections by Google and some advice from a U.S.-based representative on what revisions to make, Whitaker said the ads went live.

Compare to Eric Schmidt’s recent “I am not a crook” speech at Davos.

Whitaker’s “Google Undercover” site is quite the shocker (but only if you think public companies have a duty to citizens of the country that made them rich):

I  told of Google allowing rogue internet pharmacies to advertise on their AdWords  platform. When living in Mexico, fleeing from my indictment on a multi-million  dollar fraud case, I sold pharmaceutical products over the internet. I learned  how easy it was to advertise these products on Google’s AdWords platform and  how eager their staff was to assist me in doing so.    When policy was an issue, their staff was  quick to find a work around to continue to allow me to spend my advertising  monies, often helping me redesign my own website to conform to their policy.

Rut-ro, I think that was the sound of Daddy coming home.

Celebrity Justice: Lindsay Lohan, Google, the FTC and the Ennui of Learned Helplessness

January 17, 2012 1 comment

[Editor Charles sez:  This post first ran on December 17 before the FTC let Google off the hook. and we though it was worth another read.]

When a chicken is placed on an electrical grid inside a cage and shocked repeatedly, it begins to get the idea that no matter where it stands, no matter how high it jumps, no matter where it lands it cannot escape the pain of the electrical shock.

And eventually it stops jumping and just takes the shock.

This is called learned helplessness in which resistance is futile.  It’s also the state of mind that a massive tech oligarch would like to produce in the minds of those who oppose them to the point that the average person would say something like, why do you complain about Google?   You really need to get over it, I’m writing as a friend.

I happened to notice that news of Lindsay Lohan’s most recent brush with the law came on the same day as news leaked that Google may have avoided yet another prosecution by the Federal Trade Commission and would get a wrist slap in America for what will likely be a vigorous prosecution in the European Union for largely the same bad behavior.  This would be the same Federal Trade Commission that saw nothing criminal in Google sending thousands of cars with Wi-Fi sniffers around America under the guise of taking pictures of the people’s houses and posting them on the Internet.  Which was worse, openly invading your privacy by posting pictures of your house online, or secretly capturing unprotected Wi-Fi data.  The fact that they got away with both contributes to the sense of powerlessness that Googlers so crave.

But let’s not jump to conclusions.  Google’s back room deal with FTC Chairman Jon Leibowitz is still just a rumor and may be overstated, so let’s not overreact.  We have to assume that given Google’s well-known political influence, the truth may end up being that FTC Chairman Jon Leibowitz merely offered to slap his own wrist.

This would be the logical next step in the government’s handling of Google—after all, according to Google’s lawyer Boris Feldman, the Justice Department apologized to Google for a perfectly normal “crime doesn’t pay” speech by the U.S. Attorney for Rhode Island.  This interview followed the announcement that Google avoided indictment by a Rhode Island grand jury and paid a $500,000,000 fine for violations of the controlled substances laws.  The U.S. Attorney’s statements were perfectly normal for a prosecutor concluding a years-long grand jury investigation of a major corporation in which over 4 million documents were produced that proved that the company was shot full of bad actors—and paid the highest corporate fine in US history.  If there was anything unusual about it, it was that the speech was not made by the Attorney General of the United States.

Google, it appears, enjoys a kind of sovereign immunity—it apparently must consent to be prosecuted before it can be indicted and then those charged with enforcing the law let them go on their way like a stoned once-beautiful actress charming a cop after committing mayhem on the highway.

The joke about Lindsay Lohan is whether she’ll get incarcerated for 5 or 10—minutes.  This example of celebrity justice is particularly timely given the high degree of government interest in protecting Google.  The FTC’s celebrity justice includes corporations and their executives.  If the FTC fails to prosecute Google, what Chairman Leibowitz is teaching us is straight out of Animal Farm–that some animals are truly more equal than others.    And those who are in the tech industry oligarchy that Eric Schmidt defined as the Gang of Four—you know, giving a cartel a name without regard to the consequences—are most equal of all.

I attended last year’s Senate Antitrust Subcommittee hearing on Google’s abuse of its dominant market power.  Senator John Cornyn questioned Mr. Schmidt about Google’s nonprosecution agreement with the Department of Justice—you know, the one that the DOJ apologized about.  Mr. Schmidt told what I believe Mr. Schmidt had to know was a well-rehearsed lie—that the terms of the nonprosecution agreement prevented him from discussing it publicly.  In other words that the nonprosecution agreement was a secret.

This is false.  It is not only false, it is unambiguously false.  Senator Cornyn evidently knew it to be false–as did most of the visitors in the committee room by the rustle of whispers–and questioned Schmidt more closely about it.  After consulting with his lawyers arrayed behind him at the witness table, Mr. Schmidt declined to answer on the advice of counsel.  He did not use the words “I take the 5th” but he came as close to it as I’ve ever seen.  This did not go over well with the committee.  (And was largely suppressed in the mainstream media.)

And yet, when Schmidt walked out of the committee room, what I could see that the Senators could not was the smirk on Schmidt’s face and his lawyers—because he had gotten away with it one more time.  Given the sharp letter that Senators Kohl and Lee subsequently wrote to the FTC, I don’t think he fooled anyone on the Subcommittee although he was smirking like he’d really put one over on the Senators.

But apparently, Google can still strut its stuff to get away with it and the FTC and the DOJ political appointees just fall right in line. And don’t think this criticism is partisan–it’s not.  However biased Google is toward the left, they are quickly catching up on the right by talking out of both sides of their mouth.

So like Lindsay Lohan, Google appears to have gotten away with it.  This time.  But here’s some free advice from someone who knows about what the famous can and cannot get away with.  It’s not that they can always get away with it, it’s just that they have to do something really bad before the system will prosecute them.  Or they have to have a run in with Judge Judy.

And given what we know about Google, I feel very confident that Google has already done this really bad thing.  It’s only a matter of time until they find their Judge Judy.  Or a prosecutor like Rudy Giuliani.  Remember–if you’d told a room full of MBAs in 1985 that in a few years time Drexel would be bankrupt and Milken would be in prison, you would have been laughed out of the room.  Just like you would be now if you told a room full of computer science students that in a few years time Google will be bankrupt and Eric Schmidt will be in prison.  And that RICO would get both of them.

So don’t allow them to let you drift into that ennui of learned helplessness.  Google are not immune and we still live in a country of laws.  Even if it doesn’t look that way all the time.  Even if Leibowitz is slapping his own wrist, the Senate Antitrust Subcommittee is not.

But for today, be concerned about Jon Leibowitz’s self-inflicted wrist bruising and remember that nothing says Internet Freedom like getting away with it.

If  you let it.

If you’d like to comment on the Google investigation, you can contact the FTC:

Questions or Comments about Antitrust Issues

Contact the FTC’s Bureau of Competition, and please include your day-time telephone number.

  • Email: (Note: Email is not secure. Mark confidential information “Confidential” and send it via postal mail.)
  • Mail: Write to:
    Office of Policy and Coordination
    Room 7117
    Bureau of Competition
    Federal Trade Commission
    601 New Jersey Ave, NW
    Washington, D.C. 20580
  • Phone: (202) 326-3300
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