Blind justice: Google lawsuit silences elected state prosecutor
Mountain View moneybags tip the scales
Comment Google's success in "assassinating" a democratically-elected legal opponent last week raises troubling questions about corporate power and accountability. The feisty attorney for the USA's poorest state is now trying to make peace, after being on the receiving end of a highly unusual lawsuit from Google.
Even if you will have no truck with the Hollywood lobbying machine, you should know the facts. A global corporation which is expected to bank $60bn in revenue this year and which is worth $382bn, has silenced an elected prosecutor.
Google's income is 30 times that of the General Fund in Mississippi; its market valuation is four times the entire state's GDP. What did Jim Hood do to make himself Google's enemy? You may be surprised by the answer, which, it turns out, has nothing to do with Hollywood.
Let's examine what happened to him - and what questions it raises.
How did Jim Hood become Google's Public Enemy No.1?
In some US states, citizens vote for their state prosecutors – they're elected representatives, not nominees. They answer to the people. Google, obviously, is not democratically accountable; it's a multinational corporation. The nature of its work means it is constantly pushing the boundaries of the law, particularly wherever the ownership or use of data is in dispute. And Google pushes hard.
So hard, in fact, that earlier this year it was accused of running "a floating kingdom undisturbed by any and all nation-states and their laws". German newspaper the Frankfurter Allgemeine Zeitung (pdf, 24 pages, English) added: "Expropriation and exploitation of the data of a continually monitored society is the first rule of informational capitalism. Google is in the process of creating a supra-state."
In the UK, for example, Google has argued the UK has no jurisdiction over the company.
But shouldn't such global information processing corporations, of which Google is the largest and most famous, be held to account by the people? In the US, state prosecutors have a feisty tradition. Twenty of them pursued Microsoft – then went after the federal government for making what they considered an overly cosy settlement. The state attorneys thought the DoJ had sold out.
New York's attorney Eliot Spitzer went after ten of the USA's largest corporations, including Goldman Sachs, Merrill Lynch and CSFB for their role in creating the dotcom bubble: publishing fraudulent "research" that hyped worthless internet stocks. The ten contributed over $1.4bn in "relief" and agreed to a range of new regulations. Again, it was the states' attorneys tackling corporate power; the George W Bush administration wasn't interested.
Ten years ago the good citizens of Mississippi voted in a Democrat state attorney general called Jim Hood. Hood is certainly in the combative tradition: he's a well-liked Democrat in a Republican state, and had shown himself to be a fearless prosecutor. Hood had gone after the KKK and he'd gone after Big Pharma. That took him into new territory. Hood was appalled at what he saw.
For years, Google had profited from the advertising of rogue pharmacies, many of which were selling dangerous fake drugs. It did so despite being warned to stop. And promising to stop. Only a joint FBI-FDA sting busted the operation, and the bust, alleged the prosecutors, showed that the operation went far beyond a handful of sales staff, as one state attorney says.
"Larry Page knew what was going on,” RI federal prosecutor Peter Neronha claimed to the Wall Street Journal. The settlement saw Google pay out $500m in forfeiture in return for a non-prosecution agreement.
Hood became engaged when he looked at the settlement itself. Google continued to profit from rogue sites. For example, Google helpfully completed the query "buy oxycodone" into "buy oxycodone online no prescription cod". Hood asked why, if Google could amend its results in response to governments around the world, it couldn't amend them to protect Mississippians? In June last year his department issued subpoenas. Hood also went after Google over privacy issues, including the Safari data slurp, winning the attorneys general $17m, and collected a payout over its WiFi sniffing. He also mentioned other rogue sites.
And that tiny part of his work would become big news – in really disturbing circumstances, last week.
You are the nut, we are the sledgehammer
In a letter to Larry Page last year Hood wrote:
In my 10 years as attorney general, I have dealt with a lot of large corporate wrongdoers. I must say that yours is the first I have encountered to have no corporate conscience for the safety of its customers, the viability of its fellow corporations or the negative economic impact on the nation which has allowed your company to flourish.
What Hood, along with attorneys from wealthier states, was doing was monitoring Google's compliance with the rogue pharmacies settlement: he was policing Google. And he'd thrown in one item of economic interest to "mom and pop" businesses in his home state, as we'll see.
The campaign of innuendo against Jim Hood
Last week Silicon Valley VC-funded tech blog The Verge published a string of allegations culled from documents stolen from Sony Pictures. The Verge's story suggests that Google-bashing state attorneys had a cosy relationship with Hollywood trade group the MPAA.
Here it helps to put preconceptions and prejudices aside and judge the evidence for yourself. Unless you wear a tinfoil hat, you may find the Hollywood connection a little underwhelming.
The Verge said Hood's Hollywood funding was lucrative - but in reality, it barely buys a round of drinks, let alone a political advertising campaign.
Hood had taken a belated interest in rogue piracy sites – that much we know. The Sony documents disclose that MPAA lawyers were hoping he'd listen to them. The MPAA had given him some political funding, remember Hood needs to campaign to get re-elected every term. The Verge story describes this as "lucrative", but it turns out to be chickenfeed: just $2,500 last year. And Hood's other entertainment-biz campaign contributions are similarly Dr Evil-ish, totalling $4,000 from Comcast and NBC.
Bear in mind that Google has overtaken Goldman Sachs as a political campaign contributor: it is in the real big leagues of politico-financial muscle in the USA. Google now spends more on lobbying, according to Think Progress, than any other US company.
Google can also count on support from from "Friends of Google", and the free (but priceless) "non partisan" public support from the 150 think tanks, academics and NGOs that Google helps fund. For example, academic Professor Lawrence Lessig's fundraising vehicle also reflects Big Corporate Silicon Valley interests: his "grassroots" MayDay PAC has hoovered up big contributions from Valley moguls including Sean Parker, Peter Thiel and Chris "TED" Anderson.
And, as media critic Michael Wolff pointed out in his analysis of the story, VC-funded blogs like The Verge have an interest in reflecting the prejudices of their Silicon Valley backers, just as newspapers have traditionally reflected the interests of proprietors such as the Beaverbrooks and the Murdochs.
If Hood was really Hollywood's "go-to guy", he could forgiven for wondering what was the point. But copyright infringement wasn't his priority, we know from the documents.
The Verge's story coincided with requests from the New York Timesto disclose documents from Hood's Mississippi office. Again billed as a blockbuster expose, the documents revealed that Hood is friends with a former state AG (not unusual in the revolving door world of public policy) - they went and saw a ball game.
Also culled from the Sony hack – presumably by someone with a very powerful search engine – came another story aimed at discrediting state AGs, and Hood specifically. This one too felt strangely synthetic. It alleged that sinister and powerful (they must be, right?) Hollywood lobbyists had colluded with state AGs to "break the internet". There was a "secret plan" afoot to make parts of the internet disappear by tampering with the DNS system.
Wikipedia fuels the phony conspiracy - an excerpt from Jim Hood's biography page on Monday. Note "threatened" and "co-opted" - neither of which reflect the reality.
The MPAA is entitled to consider The Pirate Bay and similar commercial operations "rogue sites" but targeting ancient protocols like DNS is optimistic. As we explained here.
Another group identified by the Times as being in on the conspiracy, the Digital Citizens Alliance, is also described as a Hollywood-funded group, which is only partly true: it did much of the running in the rogue pharmacies case. Its funders include internet security companies and Microsoft. It's published one of the few worthwhile surveys into the murky world of for-profit trade in infringing movies. But what qualifies as "corporate social responsibility" becomes a nefarious plot - if it requires Google to change its practices.
The movie industry was asking for what ISPs had been ordered to do across Europe, block websites. And it admitted itself that using DNS to delist rogue sites from the internet had no likelihood of succeeding. As we wrote, "is 'not likely to succeed' is legalese for 'haven't got a hope'".
In fact, the extent of Hood's interest in intellectual property matters can be gleaned from the evidence.
Have a look how, and where, copyright figures in his 79-page Google subpoena. Just three press releases, none of which relate to copyright infringements, are on the Mississippi website. It's the very last item on the list. It's a subpoint.
What Hood wants to know is how Google is complying with a legally-binding settlement. And he's curious to know whether advertisers are being skimmed - as whistleblowers have long alleged. This is certainly of interest to small businesses, typically "mom and pop" shops, that use Google's Adsense. That's the only area where one can argue Hood "opens up a new front" against Google - and he's seeking more than compliance. And, given the economic interests of poor Mississippians and the fact the USA is reluctant to apply fraud or consumer protection laws against Google, it's hard to see why he shouldn't.
So The Verge and the New York Times were peddling a conspiracy theory that the evidence doesn't support. They were also whipping up anger among a constituency that has rallied for them before, very effectively: the "don't break the internet" crowd.
The phrase "break the internet" is a potent one. During the SOPA hysteria the Scottish Organic Producers Association was pummelled with angry comments and emails because it shares the same initials. Misled by advocacy groups claiming that it would be illegal for couples to email each other a recipe for roast chicken, and similarly misleading propaganda from Wikipedia, SOPA was derailed. When the dust settled, it emerged that Silicon Valley had outspent Hollywood on SOPA lobbying.
The innuendo this time was clear: state AGs were colluding to "break the internet" all over again. It ignited the same persecution fantasy that had fuelled the SOPA protests ("Let's get rid of this legislation so we can start enjoying culture again," wrote one Berkman scholar during the anti-SOPA campaign, somehow implying he couldn't play music, go to the theatre or watch a movie).
Then, after the stories had circulated, quite coincidentally Google dug into its pockets and launched a highly unusual lawsuit against the attorney general of America's poorest state.
The lawsuit against Hood and what it means
In case readers of tech blogs were too stupid to miss the innuendo, Google counsel Kent Walker rammed the point home in a blog post on Thursday. Hood was cooking up a SOPA Mark 2. On Friday Google sued Jim Hood right back. (pdf) It requested a temporary restraining order on Hood. Google faced a "substantial threat of irreparable injury" if he continued.
Google is wealthy enough to buy Mississippi many times over, so Hood's response was pragmatic. He was being muzzled: but faced with a legal bill far beyond his budget, he and his team called for peace. He pledged to negotiate a settlement. Google's deep pockets (Hood points out it's worth $382bn) have purchased justice for it. There are several disturbing aspects to how Google conducted what looks like a public character assassination to achieve this – and some worrying consequences.
Obama ♥ Silicon Valley
The current US administration has been remarkably generous to Silicon Valley. Obama's administration treats Big Tech as generously as Bush's treated Big Oil. Google staffers can be found at all levels of this administration, and Google is a significant campaign funding contributor.
It's not just Google. The Department of Justice handed Amazon a very favourable settlement in its "price fixing" case against publishers. The order handed Amazon something very valuable: a retail monopoly (technically, a "monopsony").
The DoJ even apologised to Google, the WSJ reported, for the Rhode Island prosecutor's remark about Larry Page, as quoted above. “It ended up being so far off the reservation that the Justice Department apologized to Google for it and muzzled him," the paper noted.
Overall, Silicon Valley can be pleased with the results of its lobbying and funding, particularly over SOPA. SOPA targeted foreign rogue sites, but it wasn't replaced with "a better SOPA": the mob hysteria ensured that the USA is now terrified of going after foreign rogue sites in any way. So it remains as hard as ever for Americans to control their own words, pictures and music once they're fed into the gigantic data processing plantations at Google and Facebook. These companies now set the law.
The DCA and the MPAA groups have responded that SOPA is a red herring. The DCA points out it has "gone to bat" for Google when their trademarks and apps are being ripped off. You can choose whether to sympathise or not - but even if you don't, there are troubling questions raised by Google's aggressive conduct.
Leaving aside the tripwire conspiracy theorists who descend into a red mist at the letters "MPAA" (inevitably spelled "MAFFIA"), and these are minority, there will be many more people who don't sympathise with Hollywood at all, but will be disturbed by the success of a giant, wealthy corporation in silencing democratically-elected prosecutors and the consequences of giant corporations writing the rules. America's movie industry is a significant employer and it's entitled to use the law to protect itself, even if you don't agree with its methods.
Google's strategy appears intimidatory: any attempt to attack its economic interests in the Age of Google will be met with innuendo, smears and ultimately lawsuits that nobody can afford to fight. That's some "chilling effect".
My puzzle is, why do intelligent progressives unthinkingly sign up to this agenda? The consequences of Google's success in silencing Jim Hood are that corporate power cannot be restricted by one of democracy's main mechanisms for reining it in. Google and Facebook are increasingly resembling "suprastates" to whom national - and perhaps international - law doesn't apply. But if you think that replacing laws with a free-for-all leads to anything other than the strong crushing the weak, then I have a bridge to sell you.
Imagine the uproar at the headlines: "Goldman Sachs sues Eliot Spitzer", or "Microsoft sues to suppress further antitrust investigations". This dog doesn't seem to have barked. Yet, anyway. ®
Updated to add
The court threw out Google's claim that Mississippi was causing it "irreparable harm".