Tag: google

Want Privacy? Nevermind. We Want to Censor!

Senator Chuck Schumer rounds out a trifecta of bloggable moments from the Senate Judiciary Subcommittee on Privacy, Technology, and the Law’s hearing this morning.

Ignoring the subject of the “mobile privacy” hearing, Schumer queried the witnesses from both Google and Apple on whether they will accede to his demand that they reject certain “apps” on Android phones and iPhones. The applications Senator Schumer dislikes alert people on their mobile phones to the locations of DUI checkpoints.

Senator Schumer says these apps “allow drunk drivers to evade police checkpoints,” but that statement fails to include other parties who might rightly wish to avoid police checkpoints—such as law-abiding citizens who wish to live free in this country, for example.

Recently, I landed at Harford’s Bradley International Airport late on a Friday night, heading to a Saturday morning meeting in Northampton, Massachusetts. From my shuttle bus to a remote rental car area, I saw a DUI checkpoint. After I completed the arrangements for my car, I asked the agent how I might leave so as to avoid the checkpoint. I wanted neither the delay nor the impingement on my sober liberty that a police checkpoint represents. He cheerfully directed me to a route I could freely travel.

Senator Schumer wants to prevent conversations like this from taking place on a mass scale, facilitated by advanced technologies. He stands a good chance of succeeding—RIM has already given in—because Google and Apple have repeat business before the federal government. Senator Schumer can raise their regulatory costs far higher than the value of allowing minor, but controversial apps on their systems.

If Senator Schumer succeeds, our right to freely and efficiently communicate about police activity will diminish in a way that is effectively insulated from First Amendment challenge. Privacy and freedom be damned. There are drunk drivers to catch.

Want Privacy? We Start by Blinding You!

As I noted earlier, the Senate Judiciary Committee’s Subcommittee on Privacy, Technology, and the Law held a hearing this morning entitled: “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy.” In it, Sentor Richard Blumenthal (D-CT) engaged in a fascinating colloquy with Google’s Alan Davidson.

Blumenthal pursued Davidson about the year-old incident in which Google’s Street View cars collected data on the location of WiFi nodes and mistakenly gathered snippets of “payload data”—that is, the data traveling over open WiFi networks in the moments when their Street View cars were passing by.

Some payload data may have contained personal information including passwords. Google has meekly been working with data protection authorities around the world since then, hoping once and for all to delete this unneeded and unwanted data.

Blumenthal was prosecutorial in tone, but made a classic prosecutor’s error: He asked questions to which he didn’t know the answers.

Isn’t “payload data” extremely valuable for mapping WiFi networks?, queried Senator Blumenthal.

Davidson’s answer, and the consensus of panelists: Ummmm, no, not really.

(If you were to map pay phones, it wouldn’t matter whether people were talking on them, either, or what they were saying.)

Despite looking foolish, Senator Blumenthal persisted, asking Davidson whether collecting “payload data” should be illegal. Davidson demurred, but it’s a fascinating question.

Should it be against the law to collect data from open WiFi networks? That is, to observe radio signals passing your location on a public street? Should the government determine when you can collect radio signals, or what bands of the radio spectrum you may observe? What should you be allowed to do with information carried on a radio signal that you inadvertently capture?

If the government should have this power, the same logic would support making it illegal to collect photons that arrive at your eyes or that enter your camera lens. The government might proscribe collecting sound waves that come to your ears or microphone.

Laws against observing the world around you would certainly protect privacy! Let the government blind us all, and privacy will flourish. But this is not privacy protection anyone should want.

To understand privacy, you have to understand a little physics. As I said in an earlier comment on Google’s collection of open WiFi data:

Given the way radio works, and the common security/privacy response—encryption—it’s hard to characterize data sent in the clear as private. The people operating them may have wanted their communications to be private. They may have thought their communications were private. But they were sending out their communications in the clear, by radio—like a little radio station broadcasting to anyone in range.

Trying to protect privacy in unencrypted radio broadcasts (like public displays or publically made sounds) is like trying to reverse the flow of a river—it’s a huge engineering project. Senator Blumenthal would start to protect your privacy by blinding you to the world around you. Then narrow exceptions would determine what radio signals, lights, and sounds you are allowed to observe…

Monday Links

Tax-consumers Use Our Money to Lobby for More of Our Money

I have two items published today about how governments and other tax-consumers use taxpayer dollars to lobby the government to get more taxpayer dollars. Politico Arena asks, “Will the public warm up to the health care law?” My reply:

I’m amused – at best – that the vast United States government is using my tax dollars to try to persuade voters that the signature legislative accomplishment of the president’s term is actually a good idea. Search Google for the term “Obamacare,” and the first paid link is for healthcare.gov, a government propaganda site for the Affordable Care Act. They’re also using Medicare.gov that way. And roping in poor old Andy Griffith for a TV ad that Factcheck.org says uses “weasel words” to “mislead” seniors.

Health and Human Services Secretary Kathleen Sebelius said the administration had a “lot of reeducation to do.” If administration officials were confident that their health care scheme was a good idea, they wouldn’t need to spend tax dollars – in a year when the deficit exceeds $1.5 trillion – to try to sell it to the citizens. And this raises a real question for democratic governance: Are the people supposed to tell policymakers what policies they want, or should policymakers use the people’s money to tell them what they should want?

Meanwhile, at the Britannica Blog I cite other examples of tax-funded lobbying:

Between broadcasts of “Downton Abbey” and “Frontline,” PBS viewers are implored to call their congressman and keep the money flowing. Public radio websites blare “Protect KCRW, Write your representative, write your senator.” Announcements on the radio carry the same message….

My colleague Richard Rahn complains, “Taxpayer dollars are also used to fund international organizations, which, in turn, lobby the U.S. Congress for not only more money for themselves, but also for higher taxes on the American people.”…

The Hill newspaper reported in 2009, “Auto companies and eight of the country’s biggest banks that received tens of billions of dollars in federal bailout money spent more than $20 million on lobbying Washington lawmakers in the first half of this year.” Later in the year the Huffington Post found, “Twenty-five top recipients of government bailout funds spent more than $71 million on lobbying in the year since they were rescued.”

And I ask:

Lobbying is constitutionally protected. The First Amendment guarantees not just freedom of speech and of the press but also “the right of the people…to petition the Government for a redress of grievances.” But does that mean the government itself has a right to petition itself for a piece of the pie?

Google under Siege in the Corporate State

“Google is under siege in Washington like never before,” Politico reports.

In an interview with POLITICO, a Google spokesman argued that a cabal of antitrust lawyers, lobbyists and public relations firms is conspiring against the Internet search giant. The mastermind? Google says it’s Microsoft.

Maybe it’s irony, or maybe it’s payback.

In the 1990s, Microsoft was the tech industry wunderkind that got too big for its britches — and Google CEO Eric Schmidt, then an executive at Sun Microsystems and later Novell, helped knock the software titan down a peg by providing evidence in the government’s antitrust case against it… .

But there are also increasing calls from some Silicon Valley competitors and Washington-based public interest groups for the Justice Department to launch a sweeping antitrust probe of Google. The European Union and the state of Texas have reviews under way.

Google says its rivals are fueling the attacks.

You could have read it here first. In the November-December 2010 issue (pdf) of Cato Policy Report, Adam Thierer wrote, “The high-tech policy scene within the Beltway has become a cesspool of backstabbing politics, hypocritical policy positions, shameful PR tactics, and bloated lobbying budgets.” The telcos, the broadcasters, the wireless industry, the entertainment industry – they all want the federal government to crush their competitors. And, he said, “Everybody — and I do mean everybody — wants Google dead, right now. Google currently serves as the Great Satan in this drama — taking over the role Microsoft filled a decade ago — as just about everyone views it with a combination of envy and enmity.” But then:

Of course, in a sense, Google had it coming. The company has been the biggest cheerleader in the push to impose “Net neutrality” regulation on the Internet’s physical infrastructure providers, which would let the FCC toss property rights out the window and regulate broadband networks to their heart’s content.

Meanwhile, along with Skype and others, Google wants the FCC to impose “openness” mandates on wireless networks that would allow the agency to dictate terms of service. It’s no surprise, then, that the cable, telco, and wireless crowd are firing back and now hinting we need “search neutrality” to constrain the search giant’s growing market power. File it under “mutually assured destruction” for the Information Age.

Google had it coming in another sense, having joined the decade-long effort by myriad Silicon Valley actors to hobble Microsoft through incessant antitrust harassment.Google has hammered Microsoft in countless legal and political proceedings here and abroad.

Thierer also noted that you could have predicted all this by reading Cato publications a decade earlier, such as Cypress semiconductor CEO T. J. Rodgers’s 2000 manifesto, “Why Silicon Valley Should Not Normalize Relations with Washington, D.C.” (pdf). Or indeed Milton Friedman’s 1999 speech on “The Business Community’s Suicidal Impulse”: “You will rue the day when you called in the government. From now on the computer industry, which has been very fortunate in that it has been relatively free of government intrusion, will experience a continuous increase in government regulation.”

You (could have) read it here first.

Wikileaks, Twitter, and Our Outdated Electronic Surveillance Laws

This weekend, we learned that the U.S. government last month demanded records associated with the Twitter accounts of several supporters of WikiLeaks—including American citizens and an elected member of Iceland’s parliament. As the New York Times observes, the only remarkable thing about the government’s request is that we’re learning about it, thanks to efforts by Twitter’s legal team to have the order unsealed. It seems a virtual certainty that companies like Facebook and Google have received similar demands.

Most news reports are misleadingly describing the order [PDF] as a “subpoena” when in actuality it’s a judicially-authorized order under 18 U.S.C §2703(d), colloquially known (to electronic surveillance geeks) as a “D-order.” Computer security researcher Chris Soghoian has a helpful rundown on the section and what it’s invocation entails, while those who really want to explore the legal labyrinth that is the Stored Communications Act should consult legal scholar Orin Kerr’s excellent 2004 paper on the topic.

As the Times argues in a news analysis today, this is one more reminder that our federal electronic surveillance laws, which date from 1986, are in dire need of an update. Most people assume their online communications enjoy the same Fourth Amendment protection as traditional dead-tree-based correspondence, but the statutory language allows the contents of “electronic communications” to be obtained using those D-orders if they’re older than 180 days or have already been “opened” by the recipient. Unlike traditional search warrants, which require investigators to establish “probable cause,” D-orders are issued on the mere basis of “specific facts” demonstrating that the information sought is “relevant” to a legitimate investigation. Fortunately, an appellate court has recently ruled that part of the law unconstitutional—making it clear that the Fourth Amendment does indeed apply to email… a mere 24 years after the original passage of the law.

The D-order disclosed this weekend does not appear to seek communications content—though some thorny questions might well arise if it had. (Do messages posted to a private or closed Twitter account get the same protection as e-mail?) But the various records and communications “metadata” demanded here can still be incredibly revealing. Unless the user is employing anonymizing technology—which, as Soghoian notes, is fairly likely when we’re talking about such tech-savvy targets—logs of IP addresses used to access a service like Twitter may help reveal the identity of the person posting to an anonymous account, as well as an approximate physical location. The government may also wish to analyze targets’ communication patterns in order to build a “social graph” of WikiLeaks supporters and identify new targets for investigation. (The use of a D-order, as opposed to even less restrictive mechanisms that can be used to obtain basic records, suggests they’re interested in who is talking to whom on the targeted services.) Given the degree of harassment to which known WikiLeaks supporters have been subject, easy access to such records also threatens to chill what the courts have called “expressive association.” But unlike traditional wiretaps, D-order requests for data aren’t even subject to mandatory reporting requirements—which means surveillance geeks may be confident this sort of thing is fairly routine, but the general public lacks any real sense of just how pervasive it is. Whatever your take on WikiLeaks, then, this rare peek behind the curtain is one more reminder that our digital privacy laws are long overdue for an upgrade.

The IRS’s Tax Rate on Google’s Foreign-Source Income Is 2.4 Percentage Points Too High

There’s been considerable attention to the news that the IRS only managed to grab 2.4 percent of Google’s overseas income. As this Bloomberg article indicates, many statists act as if this is a scandal (including a morally bankrupt quote from a Baruch College professor who thinks a company’s lawful efforts to lower its tax liability is “evil” and akin to robbing citizens).

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. Google’s income shifting – involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” – helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries. …Google, the owner of the world’s most popular search engine, uses a strategy that…takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros. …U.S. Representative Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee, and other politicians say the 35 percent U.S. statutory rate is too high relative to foreign countries. …Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures. “Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”

Congressman Dave Camp, the ranking Republican (and presumably soon-to-be Chairman) of the House tax-writing committee sort of understands the problem. The article mentions that he wants to investigate whether America’s corportate tax rate is too high. The answer is yes, of course, as explained in this video, but the bigger issue is that the IRS should not be taxing economic activity that occurs outside U.S. borders. This is a matter of sovereignty and good tax policy. From a sovereignty persepective, if income is earned in Ireland, the Irish government should decide how and when that income is taxed. The same is true for income in Bermuda and the Netherlands.

From a tax policy perspective, the right approach is “territorial” taxation, which is the common-sense notion of only taxing activity inside national borders. It’s no coincidence that all pro-growth tax reform plans, such as the flat tax and national sales tax, use this approach. Unfortunately, America is one of the world’s few nations to utilize the opposite approach of “worldwide” taxation, which means that U.S. companies face the competitive disadvantage of having two nations tax the same income. Fortunately, the damaging impact of worldwide taxation is mitigated by a policy known as deferral, which allows multinationals to postpone the second layer of tax.

Perversely, the Obama Administration wants to undermine deferral, thus putting American multinationals at an even greater disadvantage when competing in global markets. As this video explains, that would be a major step in the wrong direction. Instead, policy makers should junk America’s misguided worldwide system and replace it with territorial taxation.