Google: Individual Privacy Versus Corporate Profit

Sep. 5.07 | About: Alphabet Inc. (GOOG)

A magician is successful by making the audience focus on one hand while the other engages in hidden behavior. Google’s (NASDAQ:GOOG) proclamations that it is not evil are corporate PR sleights of hand, and should raise, not lower, the awareness of users of the ways it might indeed be evil. This week's

The Economist leads with a cover story, and editorial that eloquently frames our concerns.

More JP Morgan than Bill Gates

Google is often compared to Microsoft (OTCQB:MFST) (another enemy, incidentally); but its evolution is actually closer to that of the banking industry. Just as financial institutions grew to become repositories of people’s money, and thus guardians of private information about their finances, Google is now turning into a custodian of a far wider and more intimate range of information about individuals … Google, through the sheer speed with which it accumulates the treasure of information, will be the one to test the limits of what society can tolerate.

The Economist makes a skillful argument that the issue isn’t whether Google is evil today, but argues whether the foundations are laid for a large scale conflict of interest between individual privacy and corporate profit.

Google in effect controls a dial that, as it sells ever more services to you, could move in two directions. Set to one side, Google could voluntarily destroy very quickly any user data that it collects. That would assure privacy, but it would limit Google’s profits from selling to advertisers information about what you are doing, and make those services less useful. If the dial is set to the other side and Google hangs on to the information, the services will be more useful, but some dreadful intrusions into privacy could occur.

And this is the core issue. Google guards its internal processes with the utmost secrecy. Legions of consultants live off of reverse engineering the ranking schemes of Google’s engine. Gmail and Google Reader users consume free services without any knowledge of how their actions and content are being used.

When you deposit money at a bank, you have right to know how it is being used. Depositing information at Google should be no different.