Twitter recently settled a complaint from the FTC concerning some of its security practices. That story, by itself, isn’t all that interesting: basically Twitter had some problems when it was growing, the FTC slapped them down, and the company is now promising to be more careful , going forward. Nothing too out of the ordinary. However, ChurchHatesTucker points out one odd aspect to the settlement:
“Under the terms of the settlement, Twitter will be barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers.”
From that quote, it certainly sounds like Twitter will actually be allowed to mislead consumers about the extent to which it protects the security, privacy and confidentiality of nonpublic consumer information after those 20 years are up. I mean, why even put such a term on something like this?
In the meantime, it seems worth pointing out the contrast here, where the FTC (part of the Obama administration) is slapping down Twitter for revealing nonpublic consumer information… at the very same time that the very same administration has demanded all sorts of nonpublic consumer information about Twitter users. Mixed messages much?
This is a surprise, but really excellent news. Princeton Computer Science professor Ed Felten — one of the few folks out there who seems to really understand various tech issues having to do with e-voting, DRM, net neutrality, copyright and other issues has been appointed as the first ever CTO of the FTC. Felten is the guy who was threatened by the RIAA years ago for cracking their DRM and daring to want to actually publish an academic paper about how weak the DRM was. He’s also been heavily involved in exposing security weaknesses with e-voting machines (and has been legally threatened about that as well). His blog (which now includes posts from lots of others), called Freedom To Tinker, has long been a must read. Hopefully Felten is able to actually make a difference.
For all the hype about Google’s Street View data collection, it appears that the FTC now agrees that it was an accident, where Google didn’t even realize it was collecting the data. Even with the recent revelation that some of the data included emails and passwords, the FTC has now concluded its investigation of Google, and won’t be punishing the company. It appears the FTC is satisfied that Google did not realize it was collecting this data and that the company did nothing with it. Combined with the company’s new policies to try to avoid such things in the future, the FTC appears to believe no further action is necessary.
While Limewire is facing a difficult future after losing its lawsuit to the major record labels, the company was also the target of a ridiculous propaganda campaign over the years, orchestrated by a few entertainment industry organizations, which tried to connect Limewire to identity fraud, by claiming that people were putting personal data into shared folders… and this was somehow Limewire’s fault. Either way, the FTC stepped in to investigate and has now dropped the investigation, saying that, while the company could still do a better job educating users on how not to inadvertently share information, it didn’t see anything that was actionable against Limewire.
While lots of us were quite concerned about how the FTC might enforce its seemingly arbitrary new disclosure guidelines, so far, it should be admitted, that the FTC has enforced these new rules carefully. It did, for example, warn clothing retailer Ann Taylor for giving gift cards to bloggers who covered their new line of clothes. That was interesting in that it targeted the retailer, rather than the bloggers themselves — but was potentially problematic in that blaming a retailer for potential actions of bloggers doesn’t seem like correct application of liability. Still, in that case, the FTC only issued a warning.
That said, you could argue, at this point, that most people recognize that some percentage of online reviews come from insiders or friends anyway. And, considering that the FTC’s explanation for why such rules did not apply to celebrities was that most people understand that celebrities get free stuff all the time, this all seems like something of an arbitrary standard. I don’t have a problem with the FTC cracking down on these fake reviews, but it’s still not clear that the FTC has an objective standard here, rather than an arbitrary one.
We’ve written a few times about how ridiculous the FTC’s proposals to “save journalism” are. They’re much more focused on saving newspapers, not journalism. And they seem to totally misunderstand the problem — or to believe the problem is some amorphous threat from “internet aggregators,” which is based on no actual evidence. Google has now responded to the FTC’s proposal, and, as Jeff Jarvis notes, effectively “taken the FTC to school” on the basics of journalism economics and copyright.
My favorite segment may be:
The large profit margins newspapers enjoyed in the past were built on an artificial scarcity:
Limited choice for advertisers as well as readers. With the Internet, that scarcity has been taken away
and replaced by abundance. No policy proposal will be able to restore newspaper revenues to what they
were before the emergence of online news. It is not a question of analog dollars versus digital dimes,
but rather a realistic assessment of how to make money in a world of abundant competitors and
There’s also a nice dig for those who believe that paywalls are the solution (even though Google is more than willing to help publishers hang themselves with that noose). First, it notes that subscription revenue today represents only 3% of newspaper revenue, and then points out that perhaps paywalls could “raise the 3% revenue figure,” though it clearly seems to be emphasizing that we’re talking about a really minor revenue stream here.
Hopefully the FTC pays attention, but you could see them just dismissing Google as a “biased” party. The newspapers pushing these sorts of solutions are barking up the wrong tree, and hopefully the FTC realizes this, rather than providing a big crutch for the news organizations unwilling to adapt to a changing market.
Of course, we’re not the only ones looking to “save” journalism. Google, which is sponsoring and hosting our event is, looking to “save” journalism too. And, not to be left out, the FTC is working on its own plans for “saving” journalism, as well. In fact, it’s holding a roundtable discussion on the topic just one day before our get-together. Except… the FTC’s initial discussion seems a bit suspect. It has put out a “staff discussion” (pdf) of various ideas that are being considered from a policy perspective:
Jeff Jarvis summarizes the problems with the document nicely, in highlighting that they don’t appear to be about helping journalism at all. Instead, they seem almost entirely focused on helping legacy newspaper companies survive. Perhaps tellingly, the document kicks off by both admitting and denying that very claim:
Although many of the issues confronting journalism cut across different news media platforms, such as broadcast television and radio, most of the discussion in this document will use the perspective of newspapers to exemplify the issues facing journalism as a whole. Studies have shown that newspapers typically provide the largest quantity of original news to consumers over any given period of time. We include within the term “newspapers” online news websites run either by an existing newspaper or by an online-only news organization. Other sources of news are also important, of course, and proposals for action should not favor newspapers over other news platforms.
That last sentence is the “denial” part, but it never seems to come up again. Many of the proposals would almost certainly massively favor newspapers over other platforms for no good reason other than the fact that some media folks are begging the government to set up laws that favor them over upstart competitors. It’s a shame really. The FTC could have put out a document and a discussion that was focused on all of the compelling new business models and sources of reporting and journalism that are happening all over the place. Instead, it seems to just accept that such business models can’t possibly produce enough revenue to matter and support the kind of journalism necessary.
While the FTC document goes to great pains to say that it’s not clearly recommending any of these particular proposals at this point, the fact that things like expanding hot news is even listed as a possibility is downright scary. Expanding hot news is in no way about helping journalism. It’s about stifling it.
All in all the problems with the document are pretty serious. It’s an attempt to define the future by extrapolating the past. That’s not how innovation happens. However, if anyone from the FTC would like to take a more forward-looking approach to enabling journalism in the modern era, they’re welcome to attend our event…
Earlier this year, we noted that infomercial king Kevin Trudeau was sentenced to 30 days in jail for contempt of court after asking his “fans” to email the judge in a case in which Trudeau is battling the FTC. The contempt charge is a bit tricky, because it’s difficult to see what’s wrong with having people email a publicly available judge. And, indeed, it appears that the contempt charge has been overturned and Trudeau won’t have to go to jail over it after all. That said, it still doesn’t seem particularly wise to ask people to spam a judge who’s in charge of determining your fate.
We expressed some serious concerns with the somewhat ambiguous FTC disclosure rules directed at blogs and new media that went into effect last year, and we’ve been waiting to see how the FTC enforces those rules. We found it odd that the FTC apparently felt that celebrities could be held to different standards. There have been some questions about different activities — for example, Viacom’s actions in trying to make authorized uploads look as if they were bootlegs certainly appears to run afoul of the rules. And, more recently, there were some concerns over the NY Times’ lack of disclosure concerning its relationship with Apple when reporting on the iPad.
What strikes me as interesting here is that the FTC investigation focuses on the advertiser’s actions, rather than the bloggers’. That is, most of the concerns about the program were about whether the FTC would take action against bloggers. But, here, it was focused on the advertiser and its actions. That does make more sense, but does leave open a questionable loophole: if an advertiser tells a blogger to disclose some information and then the blogger does not do so… is the advertiser still liable? In this case, the FTC even mentions that one of the reasons it’s not taking action is because many (though not all) of the bloggers, who wrote about the event, disclosed the gift cards. But if they had not — even though Ann Taylor had told them to — then is Ann Taylor to blame?