Google goes Big Brother

Google's data-retention activities come under scrutiny by authorities on both sides of the Atlantic. By Tom Rowe

The EU has asked Google to justify its policy of retaining data on internet addresses and individual search habits. Norway – a country not in the EU but with identical data-retention laws – made a similar request last year. Google did not cooperate with the Norwegians, but seems to be responding to EU requests. The action could be the beginning of a concentrated effort by the EU to change the way Google does business in Europe.

Google may be violating EU privacy laws by storing data on individuals for up to two years. Other search engines like Yahoo and MSN Search have not disclosed how long they keep data. Google would argue that its data-retention periods are necessary to control hackers and prevent advertising fraud, and also to improve its search algorithms – the set of rules that the search engine uses to rank the listings contained within its index in response to a particular query. This is arguably the most important reason for Google's data retention.

CEO Eric Schmidt recently spoke of the firm's ambition to be able to answer internet user questions like, “What shall I do tomorrow?” or “What job shall I take?” To do this, Schmidt's stated ambition is to collect as much personal data as possible on users. He said, “the algorithms will get better and we will get better at personalisation”.

From one point of view, this could make searching the web easier for users, who will be recommended certain sites based on their profile. But from a privacy perspective, the plans could cause problems. When the search engine America Online (AOL) published its search logs in 2006, some information was so specific that individual people were identified and contacted by newspapers.
With the recent confirmation of plans by Google to purchase DoubleClick, an online advertising company, the fact that the mother company may be storing profiles on people is worrying regulators in the US. The Federal Trade Commission (FTC) has opened a preliminary anti-trust investigation into the $3.1bn (€2.29bn) deal, on foot of complaints by three online privacy groups in the country. In their complaint, the Electronic Privacy Center, The Center for Digital Democracy and the United States Public Interest Research Group note that Google collects search histories of its users, while DoubleClick tracks which websites are visited. The merger would “give one company access to more information about internet activities than any other company in the world”.

Google's primary source of income is selling small text ads that appear alongside its search results and on other websites. DoubleClick is the leader among companies that specialise in placing graphical and video ads online. The fact that the US action may be based on anti-trust legislation is unusual, in that this a privacy issue rather than a competition issue. Andrew I Gavil, a law professor at Howard University, said that while “privacy is not an anti-trust issue... a reduction in competition could make it more difficult to protect privacy”.

Google has said that it is confident the FTC “will conclude that this acquisition poses no risk to competition and should be approved”. The company points to the recent wave of similar acquisitions by rival search engines Yahoo and Microsoft. The latter was actually one of the voices calling for an anti-trust review of the Google deal, despite the fact that its own bid to purchase DoubleClick failed, and that it lost similar cases in the past in the US and Europe.