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Google Buzz settlement called a 'killer' for e-commerce

Grant Gross | April 26, 2011
The U.S. Federal Trade Commission's proposed settlement with Google over its bungled launch of the Buzz social-networking service could have disastrous effects on the rest of the e-commerce industry, the head of a trade group said.

Google "doesn't need to share anything with third parties," he said. "Google's so large of a first party that it can dictate terms to its third parties."

Most other e-commerce businesses provide services that share non-sensitive data with third parties, DelBianco said. "The bottom line here is the rest of the online industry is going to find it even harder to compete with Google if the Buzz settlement applies to the rest of the industry," he said.

Google is not a member of NetChoice. The trade group's members include AOL, eBay, Oracle and Yahoo.

Privacy advocate Jeffrey Chester and Katie Ratte, lead attorney in the FTC's Division of Privacy and Identity Protection, downplayed DelBianco's concerns.

The element of the settlement that the FTC would like to model an industry standard on is the requirement that Google implement a comprehensive privacy policy, Ratte said.

In addition, the opt-in proposal in the settlement focuses on information sharing by Google contrary to the company's privacy policy, she said. The settlement bars Google from making retroactive changes to its information-sharing policy, and that's similar to past privacy settlements the FTC has entered into, she said.

The provision is a "little bit more limited" than DelBianco's reading of it, Ratte said. "If they're sharing information with third parties in a way consistent with what's already been disclosed to the consumer, that doesn't trigger the opt-in," she added.

For example, if Google says in its privacy policy that it shares customer data with payment processors, and it adds a new payment processor to its services, it would not need opt-in permission from customers, she said.

Privacy advocates are pressing for changes to the settlement, and they hope a stronger version of it will become an industry standard, said Chester, executive director of the Center for Digital Democracy. But Chester doesn't see privacy advocates pushing for websites to get opt-in permission every time they make "routine, account maintenance" changes.

"I think what we're talking about is the very process of revising your profile and marketing it," Chester said. "That's what I'm getting at -- the incorporation and continued use of your data for targeted marketing. Whenever you're selling the data, making the data available for sale, and incorporating additional data ... you have to have opt-in permission."

 

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