How Google, and the rest, turned evilBY: JOHN ARLIDGE From: The...

How Google, and the rest, turned evil

BY: JOHN ARLIDGE From: The Sunday Times June 17, 2012 12:21PM

IN sunny places with bucolic names such as Mountain View and Menlo Park, the glistening headquarters of Google, Facebook and Apple seem to sweep you up off the pavement with the promise of a glimpse into the future - and a good time.

As the firms' youthful bosses arrive each morning at their eco-friendly offices in their T-shirts and trainers, they like to imagine they are a cut above conventional business leaders.

Google's mission statement is "Don't be evil" and its founders, Larry Page, 39, and Sergey Brin, 38, say they want to make the world a better place. Facebook's freshly minted billionaire boss, Mark Zuckerberg, 28, claims he is dedicated to "openness, connecting and sharing". Before his death last year Steve Jobs, Apple's chief executive, said: "Being the richest man in the cemetery doesn't matter. Saying we've done something wonderful, that's what matters."

The shine is coming off Silicon Valley's finest, however. Last week the Information Commissioner's Office (ICO), Britain's data watchdog, announced it was reopening its investigation into Google's Street View cars, which travel around taking photographs to create the search engine's popular mapping service.

It has emerged that Google programmed the vehicles to gather private data, including email, web searches and photographs, from unsecured home wi-fi networks. It also stands accused of trying to cover up what it had been doing.

European Union regulators are examining claims that Google is abusing its dominance in the search business by ranking its own products higher up in results than those of its rivals. A similar case in the 1990s tarnished the reputation and hit the profits of Microsoft, then the world's most fearsome tech behemoth.

The latest moves come as Apple faces criticism over its plans, revealed last week by The Sunday Times, for an answer to Street View: an even more intrusive 3-D service using military-grade aerial camera satellites capable of revealing objects as small as 4in across.

Facebook is having a torrid time, too. Shares in the world's most successful social network have fallen sharply since it floated on the Nasdaq in New York last month. To add to its woes, figures released last week showed its hitherto phenomenal growth is beginning to slow: in April, its site had 158m unique users, up only 5 per cent on a year earlier, according to the research firm comScore - the lowest rise since it began tracking the data in 2008.

The new figures have fuelled the anger of many disgruntled small investors who are suing Facebook over claims that it had told bankers and a select group of investors that its growth was slowing before its float - but neglected to share the information with them.

The recent setbacks mean the bosses of the big tech firms will spend a lot less time talking to their flipflop-wearing staff this summer and a lot more time talking to buttoned- up lawyers. Google faces fines if the ICO finds its Street View cars breached data protection laws. The company could also face a police investigation.

How did we fall out of love with these pillars of the new economy whose services and products have so quickly become central to our lives? The simple answer is that consumers and legislators alike have finally woken up to an uncomfortable truth: despite their laid-back image, these tech giants are just as corporate, money-grabbing and venal as the old-school businesses they so disdain.

As Rob Cox, a leading US technology writer, puts it: "Under the hoodies and the moral language lurk rapacious business people, robber barons, with the same profit motive that drives all businesses and a ruthlessness rivalling history's greatest industrial bullies."

The charge sheet against the big tech firms is long: as well as pinching the private data of unsuspecting homeowners, carrying out creepy aerial surveillance and ripping off investors, they also stand accused of violating privacy.

Each makes money by vacuuming up the digital footprint we leave online and using it to sell advertisements or market products. Hardly a day passes without some new revelation of one of them taking a byte too far.

Google recently altered its computer code to circumvent the privacy settings in Apple's Safari web browser, used by hundreds of millions of people. Facebook has come under fire for allowing companies to turn users' "likes" into advertisements that are then sent to their own online friends.

Google is accused of "looking the other way" on copyright. Newspapers and magazines say the search engine "steals" their content and uses it to sell lucrative advertisements. Like Google, Apple is under investigation for monopolistic practices. The US justice department is examining claims that the firm, along with several publishers, colluded to raise the price of electronic books.

Apple has also been condemned for using Chinese manufacturers with lousy working practices. Foxconn, the Chinese factory where Apple's iPhones are made, has been investigated for treating its workers so badly that many have committed suicide.

Worst of all, say critics, is the aggressive tax avoidance practised by the big three. Google, Facebook and Apple have each set up elaborate webs of overseas companies to funnel revenues away from high-tax economies, such as Britain and Germany, through tax havens such as the Cayman Islands. The complex arrangements allow them - legally - to slash their tax bills.

Google, for example, paid just 1.2m pounds ($1.87 million) in British corporation tax in 2010 on sales that topped $3.4 billion. Apple has stashed two-thirds of its $110 billion cash hoard overseas, out of the reach of the American taxman. Facebook, now worth more than $60 billion, paid a staggeringly low $618,000 in British corporation tax in 2010.

At every step of the way the companies have resisted attempts to clip their wings and even allegedly frustrated investigations into their less savoury practices. In April the US Federal Communications Commission said Google had "deliberately impeded and delayed" its inquiry into the Street View data collection.

The tech giants have fought bitterly against any restrictions on internet use, opposing government attempts to introduce filters to prevent children accessing pornographic or violent images and moves to limit cyber bullying. Such "catch-all" filters do not work, they insist.

Critics retort that the companies will not introduce filters because they would limit search results, reducing the adverts that could be sold. Search engine-driven advertising is a $10 billion market.

Put the charges together and some observers say tech firms are taking over from banks as the corporate villains of our times. "Technology is replacing banking and finance as the industry most likely to worry government and the public," Time magazine said recently.

Google has apologised for harvesting data. "We screwed up," said Eric Schmidt, its executive chairman. The firm denies that it engages in anti-competitive behaviour and insists it offers safe web searching to protect children. Facebook rejects claims that it misled investors when it floated and says it is beefing up its privacy controls. Apple denies monopolistic practices, while Jobs's successor, Tim Cook, has visited Foxconn and ordered fresh checks on factory working conditions.

Understandably, the three also emphasise the positives: they have created the greatest explosion of democracy, access to information and ability to connect and communicate that the world has ever seen - all of which has generated great wealth.

This is undoubtedly true yet there is a nagging doubt that, like the big banks before the financial crash, these titans of the new economy are woefully lightly regulated.

If an airline does something as simple and annoying as lose our luggage, we get compensation. If a web operator pinches our data and then tries to cover its tracks, we get nothing, even though data theft can lead to identity theft. "The web is largely unregulated," said Professor Peter Sommer, a London-based cyber expert.

Some people are trying to fight back. Authorities here and in America are attempting to close loopholes to force the tech giants to pay more tax. Politicians are drawing up an online privacy "bill of rights". To protect copyright, two anti-piracy bills have been proposed in the United States.

Yet there is little evidence that such moves are working. Heavy lobbying by Silicon Valley, whose economic might makes it of vital importance to the American economy, has seen off proposed legislation. While some users might make use of new privacy codes, most of us are so wedded to our iPads, smartphones and Facebook that we cannot imagine life without them and will not give them up - regardless of how the companies which own them behave. This article was prepared using Google's search engine and its suite of online word-processing products.

Ironically, big tech's critics might find a solution in tech itself. Alarmed by the backlash against them, Google, Microsoft and Apple have indicated they might support the development of a "do not track" button in all web browsers. By flipping a switch, users could instruct websites not to monitor their online behaviour.

Independent tech firms are starting to offer consumers the chance to protect their data. SafetyWeb helps parents monitor their children's activities on social networking sites and is launching myID.com, a privacy protection service for adults. Other firms offer consumers the chance to profit from their personal information: the London-based Allow Ltd gathers our data and lets us sell it to firms we approve of - in return for a small fee.

Then there is the ultimate technological solution: switch off. Google and Facebook know that if they lose the trust of their users they are only a few clicks away from extinction, such as AltaVista or Netscape. Apple has had more than enough brushes with corporate mortality to know its future is not guaranteed.

In the end it is you and me, the users, who have the real power over the big three. If we continue to log on they will carry on growing - and doing whatever they like. If we turn against them or switch to a new operator whose products and values we prefer, they will die in a heartbeat. The choice is ours - at the click of a mouse.

http://www.theaustralian.com.au/news/world/how-google-and-the-rest-turned-evil/story-fnb64oi6-1226397836554