Facebook discovers Washington, DC – not the other way round


From Om Malik’s April 28th weekly newsletter

❝ Bloomberg Technology host Emily Chang asked me where I think Facebook will be in a year. My answer: Pretty much where it is now. It will be unchanged or even emboldened, thanks in part to its new strategy of buying protection in Washington. Like many other industries — for example, tobacco and oil — Facebook has figured out that it can help write regulations that will allow it to exist blissfully and put its competitors at a disadvantage.

To tame Washington, you must have the right people. So, the company has begun hiring individuals that will help achieve this goal. These are seemingly innocuous moves in what is a long game…

❝ Neither advertisers nor Wall Street — the two constituents that matter more to the company than the people — don’t seem to care about the regulations and the stream of outrage news. Macquarie Research analyst Ben Schachter put it best when, in a note to his clients he pointed out that, if you “take away all the headlines, the controversies, the regulations, and what you are left with” is a company with lots of users on its platforms that “advertisers will pay to reach.”

The operative verb being “PAY”. Advertisers paying Facebook. Facebook paying lobbyists. Facebook paying new hires with experience at balancing the whole quasi-payola mechanism.

Office Depot rigged malware scans to sell you tech support


❝ Office Depot and a partner company tricked customers into buying unneeded tech support services by offering PC scans that gave fake results, according to the Federal Trade Commission. Consumers paid up to $300 each for unnecessary services.

❝ Office Depot and its software supplier, Support.com, have agreed to pay a total of $35 million in settlements with the agency. Office Depot agreed to pay $25 million while Support.com will pay the other $10 million. The FTC said it intends to use the money to provide refunds to wronged consumers…

❝ “Defendants bilked unsuspecting consumers out of tens of millions of dollars from their use of the PC Health Check program to sell costly diagnostic and repair services,” the FTC alleged in a complaint that accuses both companies of violating the FTC Act’s prohibition against deceptive practices. As part of the settlements, neither company admitted or denied the FTC’s allegations.

Office Depot is considered one of the best of their peers. Kinds makes you wonder what some of their competitors might be up to. Or not.

LifeLock to pay $100 million settlement for making false claims about protecting data

LifeLock which sells identity theft monitoring and fraud detection services, has agreed to pay $100 million to settle charges that it failed to properly protect its customers’ data, the Federal Trade Commission said…

The FTC had accused LifeLock…of violating a 2010 court order that required it to take steps to secure data properly and said that LifeLock falsely advertised that it protected that information, among other allegations.

The $100 million is to be deposited to the U.S. District Court for the District of Arizona. A total of $68 million may be used to reimburse consumers in a class-action lawsuit. The balance will be used by the FTC to reimburse LifeLock customers not involved in the lawsuit…

LifeLock paid $12 million in 2010 to settle charges that it overstated the value of its services. The FTC said then that LifeLock advertised that it could stop identity theft for consumers who buy its service. But the FTC said the company’s fraud alerts did not protect customers from misuse of existing accounts, the most common form of the crime.

As part of the settlement…LifeLock is required to refrain from misrepresenting how much they can do to protect their customers from identity theft and to implement a data security program…

Or they could just add insult to injury like some of the social networking companies and sell your personal data. 🙂

How to win friends & buy influence in Washington DC — Google edition

The Wall Street Journal recently published a report based on accidentally released documents about FTC’s two-year investigation into Google. The 160-page document concluded that Google’s “conduct has resulted—and will result—in real harm to consumers and to innovation in the online search and advertising markets.” I am sure Yelp and others would agree with that conclusion, and are contemplating further action.

The search results manipulation by Google has resulted in complaints that are far worse than anything FTC could have done — people have complained of declining quality and user experience. The emergence of social and mobile environments have taken some zing out of Google. Nevertheless, the WSJ report and reading through the excerpts made me wonder if there is a correlation between FTC investigation and Google’s lobbying efforts…

And after Om’s intro to the topic – we might look back at this:

Google News buries news of Google’s FTC investigation

After the embarrassing leak of a U.S. Federal Trade Commission investigation that described how Google shifted around its search results to harm competition, Google News has shifted its search results to harm journalism, promoting instead a fluff piece glorifying Google…

The exposé of Google’s “strategy of demoting or refusing to display, links to certain vertical websites in highly commercial categories,” as described in the FTC’s 2012 investigation, which concluded that “Google’s conduct has resulted – and will result – in real harm to consumers and to innovation,” was essentially erased from existence in 2013 when Google agreed to make a few minor changes to avoid a federal antitrust lawsuit.

The Wall Street Journal noted that the FTC Commission watered down its public conclusions issued about Google before letting the company off the hook, leaving the findings of the staff investigation secret for two years.

Daniel Lyons reply is included in the AppleInsider article as an update.

Read it – and judge for yourself.

FTC expects record claims over AT&T cramming scam

AT&Y scum

Over 359,000 AT&T customers have already filled out an online application to obtain refunds from the company, which padded phone bills with suspect SMS charges.

Since the Federal Trade Commission announced a $105 million settlement with AT&T last week over fake billing charges, 359,000 individuals have already come forward to claim their share of the refund money, and that number is expected to climb.

The claims relate to so-called “cramming” charges in which AT&T customers paid extra fees, usually in the amount of $9.99, for “premium SMS” services that promised to deliver content like horoscopes and celebrity news to cell phones. Such services are a relic of the pre-smartphone days, but people still paid for them, often without authorization, with AT&T receiving a commission on the charges…

The process for making a claim is very straightforward: anyone who was an AT&T customer after January 1, 2009 can simply fill out this online form, which only requires a phone number and address.

Crooked corporation of the day, eh?

The feds have started thinking about privacy and profits

Florida license plate cams
Anyone snap a photo of your license plate lately?

The power of data helps Facebook find our friends and Netflix choose our movies but, as recent reports make clear, there’s also a looming dark side to the growing consumer data economy…

A Connecticut data broker called “Statlistics” advertises lists of gay and lesbian adults and “Response Solutions” — people suffering from bipolar disorder.

“Paramount Lists”…in Erie, Pa. offers lists of people with alcohol, sexual and gambling addictions and people desperate to get out of debt.

A Chicago company, “Exact Data,” is brokering the names of people who had a sexually transmitted disease, as well as lists of people who have purchased adult material and sex toys.

Meanwhile, a new investigation into license plate scanning describes how enterprising individuals are strapping cameras in order to troll parking lots for cars to repossess. In doing so, the camera-equipped cars hoover up every license plate they see, while adding time and location data; the drivers then relay this data to brokers like Digital Recognition Network of Texas, which claims to collect plate scans of 40 percent of all US vehicles annually.

The scope of this private data collection is all the more remarkable since the private companies that collect it are not subject to the obligations to delete records that are imposed on many government and law enforcement agencies…

Right now, the Federal Trade Commission is conducting an investigation of nine major brokers — Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf, and Recorded Future – to see how they are using consumer information.

After all, we live in the land of the free. If individuals – or corporations – were inclined to invade our property for one or another phony reason, illegitimate rationale, foolish premise, we can always count on the government to defend our rights.


For $2 a Star, a Retailer Gets 5-Star Reviews – WTF?

In the brutal world of online commerce, where a competing product is just a click away, retailers need all the juice they can get to close a sale.

Some exalt themselves by anonymously posting their own laudatory reviews. Now there is an even simpler approach: offering a refund to customers in exchange for a write-up.

By the time VIP Deals ended its rebate on Amazon.com late last month, its leather case for the Kindle Fire was receiving the sort of acclaim once reserved for the likes of Kim Jong-il. Hundreds of reviewers proclaimed the case a marvel, a delight, exactly what they needed to achieve bliss. And definitely worth five stars…

By last week, 310 out of 335 reviews of VIP Deals’ Vipertek brand premium slim black leather case folio cover were five stars and nearly all the rest were four stars. The acclaim seemed authentic, barring the occasional indiscretion. “I would have done 4 stars instead of 5 without the deal,” one man bluntly wrote…

But three customers said in interviews that the offer was straightforward. Searching for a protective case for their new Kindle Fire, they came upon the VIP page selling a cover for under $10 plus shipping (the official list price was $59.99). When the package arrived it included a letter extending an invitation “to write a product review for the Amazon community.”

In return for writing the review, we will refund your order so you will have received the product for free,” it said…

The merchant, which seems to have no Web site and uses a mailbox drop in suburban Los Angeles as a return address, did not respond to further requests for comment. As of last week, the company (as opposed to its products) had received 4,945 reviews on Amazon for a nearly perfect 4.9 rating out of five…

Under F.T.C. rules, when there is a connection between a merchant and someone promoting its product that affects the endorsement’s credibility, it must be fully disclosed. In one case, Legacy Learning Systems, which sells music instructional tapes, paid $250,000 last March to settle charges that it had hired affiliates to recommend the videos on Web sites.

Amazon, sent a copy of the VIP letter by The New York Times, said its guidelines prohibited compensation for customer reviews. A few days later, it deleted all the reviews for the case, which itself was listed as unavailable. Then it took down the product page itself.

RTFA. Some of it is useful, some humorous. Some of it is about as ignorant as you would expect from an American newspaper. Apparently, they expect one of the largest retailers in the world – amazon.com – to maintain a staff of reviewers to read and evaluate the personal reviews of thousands of products on a daily basis.

Jay Rockefeller introduces “Do Not Track” bill in Congress

Senator Jay Rockefeller (D-WV) has introduced a new “Do Not Track” bill to Congress that aims to hold companies accountable for collecting information on consumers after they’ve expressed a desire to opt out. Called the Do-Not-Track Online Act of 2011 [.pdf], the bill would create a “universal legal obligation” for companies to honor users’ opt-out requests on the Internet and mobile devices, and would give the Federal Trade Commission the power to take action against companies that don’t comply…

According to the bill, the FTC would be tasked with coming up with standards for companies to implement within a year of the bill being signed into law. After a user makes a request to stop being tracked, the companies in question would only be able to continue collecting certain information on customers if it’s absolutely necessary in order for the site or service to function. That information must still be anonymized or destroyed after its usefulness expires, and the user must still give explicit consent for the information to be used that way…

Privacy groups seem impressed with the bill, pointing out that the FTC has a good deal of flexibility in tailoring a persistent opt-out mechanism. “This legislation would give Americans the right and the right tools to browse the Internet without their every click being tracked,” Consumer Protection director Susan Grant said on a call to discuss the bill after it was introduced. Chris Calabrese from the ACLU agreed, describing the bill as “a crucial civil liberties protection for the twenty-first century…”

Of course, the final details for how companies are supposed to comply with the guidelines of Rockefeller’s bill have yet to be hammered out, but the privacy groups seemed optimistic that the FTC could handle the burden. After all, the FTC itself has been pushing for a Do Not Track mechanism online since 2010, and the Obama administration has voiced its support for some kind of “consumer privacy bill of rights.” Also, three of the four major browsers (Firefox, Internet Explorer, and Safari) either already support or will soon support Do Not Track opt-out headers originally developed by Mozilla, giving the FTC an easier launching point.

Geeks generally come in three flavors of concern: those perfectly happy with providing their own means of security; those who could care less; and the ever-popular paranoid look-under-your-mouse-pad-every-night for electronic listening devices. I believe the average non-geek consumer fits in the middle category.

None of which predicts the response to the bill if it passes. I would think even the unconcerned would opt for non-tracking if it was a simple process. Paranoids won’t believe it’s possible in the first place – and will probably skip opting out because it might point out their presence on the planet.

PR firm ordered to remove phony iTunes reviews

A public relations company and its owner have been cited for having staff post glowing reviews of game applications for companies it represents at the online iTunes store.

According to the U.S. Federal Trade Commission, Reverb Communications and its owner Tracie Snitker engaged in deceptive advertising by having its employees pose as ordinary consumers when posting the reviews.

“Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising,” said Mary Engle, director of the FTC’s advertising practices division.

The California-based Reverb Communications represents dozens of major video game companies and developers.

The FTC, however, claims Reverb did not disclose the reviews were written by its staff, nor that they were hired to promote the games and that they often received a percentage of the sales.

That information is relevant to consumers who were using the endorsements as a guide to whether or not to buy the games…

Under a proposed settlement order, Reverb will have to remove any previously posted endorsements that misrepresent the authors as ordinary consumers.

Sleaze ain’t any less relevant when it’s geeks and gamers indulging in the practice.