Confused by All of the Legal Action Going On over Privacy and Antitrust? You Are Supposed To Be...

Batman-Arkham-City-The-RiddlerDuring the last few years the corporate world has enjoyed something of a respite from the typical anti-trust laws that are upheld by the Sherman Antitrust Act. This means that things like the MPAA, RIAA, the Viacom merger and too many others to count have all gotten the thumbs up from regulators. It was not until the Occupy movements hit the streets in major towns that we began to see regulation agencies begin to take notice of some of the more outrageous violations. It was as if they suddenly woke up and said “Hey! You can’t do that…” of course it is an election year and the majority of voters are very unhappy. The incumbent politicians have to at least appear to be doing something.

To make sure that consumers know they are working for their benefit federal regulators have gone into overtime. They filed a suit to block the AT&T T-Mobile merger, a suit against Apple and a few Book publishers over price fixing of eBooks, and are knee deep into Google for its many violations. Let’s not even get into the string of “what’s all this then” style congressional hearings on privacy that have sprung up only to fade away into non-existence.

So, on the one hand we have the push to show everyone how much the government cares…, but wait. Do any of these suits have merit? We have been reading the filed complaints and also the responses for a few of these and have found some interesting things; almost all of the companies called into question should be fined or held accountable for what they are charged with, but we doubt that any real consequences will be given to them.

For starters, although it is outside the realm of Sherman, let’s take a look at the recent $25,000 fine that Google was given for collecting private information without user consent. The case as filed claimed that Google collected personal information on people’s wireless networks using their street view cars. This was actually found to be in violation of federal wiretapping laws. Google was let off with little more than a slap on the wrist in terms of the fine that was brought against it. The fine was not even about the gathering of information; it was because Google delayed getting evidence to the FCC as requested, but now the FCC can look like they have done something and the headlines will say that Google was fined for gathering details on private wireless networks. The US Electronic Privacy Information Center (EPIC) has called the FCC out for letting Google off when a federal court already found them guilty. Sadly it is unlikely that the FCC will change its mind.

The next in our listing we find a suit that falls well within the Sherman Antitrust Act. This is the suit against Apple and a group of publishers for fixing eBook prices.  Apple is trying to paint itself as the white knight here claiming that they allow the publishers to set the prices (as long as Google gets their 30% of course and the lowest price). Now there are a couple of issues with Apple’s claims. First is that Amazon is not setting the pricing high, in fact Amazon’s prices are usually much lower than Apple’s and even the ones at Barnes and Nobel ($9.99 for most titles Vs. the range of $12.99 to $14.99). The second point is that while Amazon might have a dominant market place they are not the dominant product. You can use Kindle on just about any device from Windows to iPhone. iBooks is only on iOS and nothing else. Apple currently enjoys a 54% market share in the tablet space and is the single largest seller of smart phones (they sell more iPhones than any of the individual companies). This shows that Apple has the stronger market position not Amazon. In addition the settlements with many of the publishing companies named in the original complaint will work against Apple (it is funny how Apple talks about their market domnance all the time except for here where they are the smaller oppressed company now).

By setting the pricing of the books at a minimum of $12.99 AND requiring that Apple gets the lowest online pricing Apple used their dominant position to artificially increase the eBooks and to force this price on their competitors. As far as the collusion part, a signature on any agreement to these terms by any of the publishers should be enough. The rest will come out in the emails and phone conversations that took place.  Will anything be done about this? We doubt it to be perfectly honest. All that needs to happen is the suit remain open long enough to get through the election and even if the  DOJ wins, there will be little done to any of these companies.

Now here we have only two examples of a much larger issue. The issue is when regulators appear to be doing the right thing while working on the opposite. The best example of this is with CISPA, the Cybersecurity Intelligence Sharing and Protection Act. We have heard more and more about how this will not be anything like SOPA or PIPA and is all about Cybersecurity; a term that is not clearly defined, but manages to include… intellectual property (IP). Anyone care to guess what the legal definition of Intellectual Property includes? If you guess Copyright then you are further ahead than many of our lawmakers who seem to have forgotten this. On top of being for the protection of IP the Department of Homeland Security will be granted a whole group of new permissions and powers to monitor and close down websites found to be a cyberthreat (remember IP is protected here…).  You may also have heard that companies can freely share any and all of your information without violating privacy laws and not just with law enforcement. They can now share this in the interest of Cybersecurity (how many of you want to bet it will be traded like money?) with other companies.

You have Facebook supporting this, but saying we should trust them with our personal data… wait isn’t Facebook the same company that got into trouble for letting advertisers use user pictures without user consent? Didn’t Facebook just completely remove the word privacy from their terms of use? Hmmm I do not know about you, but I am not so sure I would trust them (and yes we do use Facebook). On the other hand Google Co-Founder Sergey Brin is calling out Facebook and others for their support CISPA while trading user information between services and possibly trading this to other third party developers that use Google’s internal APIs. Then you have Netflix’s CEO calling out Comcast for unfair practices by excluding their Xfinity streaming service from bandwidth caps, but not anyone else. This is while they have opened up a lobby group to support bills like SOPA (although no SOPA as that is dead).

In the run up to the elections in the US things are going to get more and more messy as the PR campaigns get into gears for both corporations and politicians. Meanwhile, our old friend Anonymous has been very silent on these items; they have dropped a listing of companies involved in backing CISPA and have pushed the links for the petitions going around, but have not fully entered the fray. I have to be honest here… we should expect them any day now. I do not know what they will do, but I am fairly confident that something will happen and this time they might not give Facebook the pass they have before.

Image from Batman Arkham City

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