Sen. Franken: Consumers Lose Choices When Companies Get Too Big

Count Al Franken among the critics of Google's new privacy policy. In a speech delivered last night to the American Bar Association's antitrust section, the Democratic senator from Minnesota bashed Google for its decision to unilaterally revise its terms to enable it to aggregate information about users from Android, YouTube, Gmail and other services.

Franken argues that Google is so large that it can make questionable decisions without risking user defections. "We rely on the market to hold these corporations accountable," he said. "But what if the market fails to do so -- what if a company is able to establish a dominant market share and insulate itself from that pressure?"

He then answered his own question. The result, he said, is that people's "right to privacy can be a casualty of anti-competitive practices."

For example, he said, Google's recent changes to its privacy policy demonstrates that "consumers lose meaningful choices" when companies become too powerful. "If you want a free email service that doesn’t use your words to target ads to you, you’ll have to figure out how to port years and years of Gmail messages somewhere else, which is about as easy as developing your own free email service," he added.

Franken didn't just bash Google. He also cited Facebook as an example of a company that has grown so large it need not worry that users will flee as a result of privacy decisions. "You might not like that Facebook shares your political opinions with Politico, but are you really going to delete all the photos, all the posts, all the connections -- the presence you’ve spent years establishing on the world’s dominant social network?" he asked. (Facebook said in January it would use software to mine posts for users' feelings about candidates and then send aggregated information to Politico.)

"These companies’ profitability depends in large part on their ability to target ads to you, which in turn depends in large part on what they know about you," he added. "Shouldn’t we be concerned that, as these companies that trade in your personal information keep getting bigger and bigger, they become less and less accountable?"

Franken's points are worth discussing, but he overstates his case. It's true that Google doesn't let people opt out of its new privacy policy, but users can somewhat control how data is compiled by signing out of the service, using different browsers for different tasks, or directing Google not to store their search history.

And, while Facebook is sharing some aggregated information with Politico, the data isn't likely to be linked to particular individuals.

Of course, it's no secret that Facebook and Google have made more than one objectionable move regarding privacy in the past. But, even if those moves haven't dented the companies' market share, the companies have faced legal headaches as a result. Consider, class-action lawyers have targeted both companies, and met with some success. Google agreed to an $8.5 million settlement of a lawsuit about the launch of defunct social networking service Buzz, which exposed some people's email contacts at launch; Facebook said it would pay more than $9 million to settle a lawsuit stemming from Beacon, which shared information about people's ecommerce purchases.

Also, the Federal Trade Commission has its eye on the companies. Google recently signed a consent decree promising that it will seek users' opt-in consent before sharing information about them more broadly than its policy allowed when the data was collected. Facebook agreed to similar terms, though that agreement isn't yet final.

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