Good Honest Dollar $$

The conviction in Italy last week of three Google employees over a shocking video posted by a group of students on YouTube is extremely disappointing, and raises serious issues about how far providers of user-generated content platforms have to go in order to satisfy their legal obligations.

To be sure, Google does have a duty of care with regard to prompt removal of videos containing illegal or malicious content upon becoming aware of their existence. But the company cannot be held responsible every time someone chooses to upload these types of videos. Nor should they be expected to go to the extreme measure of pre-screening each and every video prior to them being made available for public viewing.

 
The Italian decision
The case in question revolves around a video which was posted by students at a school in Turin, Italy. The video in question showed them shamefully bullying an autistic schoolmate.

Although the video was posted in September 2006, Google staff were not made aware of its existence until two months later, when they received two requests to have it removed. Subsequently, the video was removed within hours, and the company assisted Italian police in identifying the individual responsible for its upload, who was later sentenced to ten months of community service (refer official company response).

But this did not satisfy the Italian courts, and a judge in Milan last Wednesday convicted three Google executives with violating Italian privacy laws in relation to the incident. Each was handed a six month suspended sentence.

 
Two troubling aspects
There are at least two troubling aspects of the decision:

1) that Google is being held responsible for content which it did not create and does not own; and
2) that the legal standard to which Google is being held does not accord with realistic commercial expectations.

Given that Google did not either own or create the video in question, neither the company nor individual members of its staff should be held responsible for its content. The same applies for all platforms of user-generated content (Blogger, MySpace, Facebook, Twitter etc). Users, not service providers, create and own the content. Therefore, it is individual users, rather than service providers (who merely provide a platform for individual users to share their creation), who should be responsibility for illegal or inappropriate material.

(Also troubling is the fact that the punishment applies not to the company itself but to individual Google employees. If Google committed any crime, surely the offense occurred at the corporate level and not at the level of any individual staff member. Any associated punishment should therefore apply to the company itself, not to individual employees)

 
Unrealistic expectations
More troubling still – questions the decision raises about the length to which Google and others have to go in order to satisfy legal requirements.

Given the extent of Google’s efforts in this case, it is hard to see what more the company could have done, and the fact that these efforts were not deemed to be sufficient raises some very troubling questions about the extent to which Google and others have to go in order to satisfy Italian law. Really, what else could they do? Pre-screen each and every video prior to upload? Pre-screen each and every blog post prior to publication on Blogger? How about Facebook – should they have to pre-screen each and every message or photograph?

No. Even if Google and others are deemed to have a duty of care regarding illegal or malicious content, such a duty should not extend beyond realistic commercial expectations.

 
Let’s hope the law adapts
Services like YouTube, Facebook and Blogger are subject to abuse by those intent on malicious or illegal activity.

But they also allow millions worldwide a platform by which they can create, share and connect with others.

Hopefully, over time, the law will adapt to the new media environment. But for now, decisions which impose unrealistic burden on providers of these services are very concerning for both the industry and the millions of users who enjoy the wonderful benefits which these types of services provide.

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One might have thought that private security guards are supposed to ensure the safety of the general public on premises which they patrol.

Apparently not – at least not in the case of those employed by Olympic Security at the Seattle Bus Station, who just stood there and watched as a fifteen year old girl was beaten unconscious and robbed in a vicious assault last month.

Three parties share in the blame for this appalling incident: Metro Transit, the guards themselves and Olympic Security (the guards’ employer), which should certainly be stripped of its contract.

Taxpayers do not pay for guards to stand around and do nothing.

 
The incident
Footage of the entire incident can be seen here.

Shortly after the girl in question was seen talking to one of the guards (apparently pleading for help), another girl approached, launching a vicious assault in which the victim was knocked to the ground and repeatedly punched and kicked in the face. Meanwhile, a third person stole her bag, including mobile phone and iPod.

Aside from having one guard call for help, none of the three guards on duty did anything. They simply stood there and watched. Even after the victim lost consciousness, they did not bother to check if she was OK.

Their excuse: strict orders preventing them from intervening in any confrontation – a claim supported by both Metro Transit and Olympic Security, employer of the guards in question.

 
Three parties at fault
Pathetic.

All three parties involved had a duty of care regarding public safety. All three failed abysmally and share in the blame:

 
• The guards themselves.

To be sure, the guards themselves are not police and do not have the same rights or authority as members of the police force – especially in cases like these involving physical contact with members of the public. Furthermore, it should also be acknowledged that failure on their part to comply with strict orders could have serious legal and/or disciplinary repercussions, and that they themselves are not therefore in any position to disregard these orders willy-nilly.

Still, they have no excuse. There were three of them – surely their ‘orders’ would not have stopped them from either: (a) preventing the attack by simply standing between attacker and victim; or (b) bothering to check whether or not the savagely beaten victim was Ok.

(Moreover, surely there is a case where you abandon orders for blatant simple common sense when it is clear that the safety of a member of the public is in serious jeopardy)

No – their actions reflected blatant negligence for which they had no excuse.

 
• Metro Transit.

Bottom line: Metro Transit are responsible for public safety at any station or terminal under their operation, and cannot be absolved of responsibility when incidents like this occur regardless of any contributory negligence on the part of either Olympic Security or the guards themselves.

The buck stops with them – period. They failed miserably.

 
• Olympic Security:

Finally, Olympic Security themselves must share the blame, and it is pleasing to see that their contract is under review following this incident.

They can argue all they like about how their staff did as required under the contractual agreement with Metro Transit. But this is a weak argument. As a private security firm, they share in a duty of care, and should not accept any contract under which members of their staff are prohibited from doing what is necessary to protect the public. And given their expertise, it is their responsibility to ensure that these types of contracts allow for proper procedures to handle any security incidents that might occur.

They are also responsible for training their staff how to handle confrontations – and this does not include standing, watching and doing nothing.

Rather than miserably trying to justify their actions, Olympic Security should just come clean and publicly acknowledge a clear and simple fact – they, too, failed in their duty of care.

They should also be stripped of their contract. They are not paid to have their staff stand and watch whilst fifteen year old girls are beaten and robbed. If that’s what’s going to happen, then their services are not of a standard which is appropriate to meet the ongoing requirements of the travelling public.

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(Image provided by Sally Mahoney via Wikipedia)

Time will tell whether or not Pepsi’s move not to advertise at all during this year’s Super Bowl will pay off – after being the single biggest advertiser in last year’s event.

But what is for sure is that the company’s latest marketing push – under which grants are provided to support a range of community projects chosen by a public voting system – represents an ingenious idea for which the company is to be applauded.

 
The Strategy
As a result of changes in marketing strategy, Pepsi decided not to advertise at all during the Super Bowl this year.

Instead, under the Pepsi Refresh Project,  an amount roughly equivalent to the $20 million which it shelled out on the event last year is being allocated toward grants to a range of charities and community organisations.

What is unique about the project is that Pepsi will not decide itself which projects are to receive the funding. That decision will be made by members of the public via an online voting system.

The system works as follows:

(1) Individual members of the public are invited to submit their ideas for worthwhile community projects

(2) Members of the public vote on their favorite ideas

(3) The company provides grant funding of between $5,000 and $25,000 for the most popular projects.

 
Why the strategy is so good
This type of system has three key benefits over and above straightforward corporate donations:

 
• Backing causes which really matter to consumers.

The best thing about Pepsi’s new approach is how it allows consumers themselves to dictate where the money is spent.

Consumers themselves are best positioned to understand what causes they are passionate about. Putting decisions about allocation of cause related funding in their hands ensures that projects supported under the program are relevant to Pepsi’s target market.

 
• Generating consumer involvement.

Judging by the attention Pepsi’s new campaign has generated online, it appears to be doing well in one of the most challenging aspects of cause related marketing – getting consumers to sit up and take notice.

Why? One reason is that Pepsi’s approach is genuinely unique and therefore stands out from the crowd. But more importantly, through the submission and voting process, the project is generating involvement on the part of the general public, giving them a real reason to pay attention.

 
• Reinvigorating the brand.

There is little doubt about the relationship between a company’s marketing strategy and consumer perceptions of its brands.

Innovative marketing campaigns promote a positive brand image. Vice versa for campaigns which are dull, boring and ‘same as everybody else.’

By trying something new and innovative, Pepsi is positioning itself on the cutting edge – exactly where the company wants to be given the importance of the youth market and the associated need for the brand to be seen as hip, cool and ‘out there.’

 
Over to You
What projects would you like to see Pepsi support in your community?

Do you think companies are generally good at understanding what causes are important to consumers?

Is corporate sponsorship of community projects is more/less powerful than advertising at major sporting events like the Super Bowl?

Not being familiar with American law, I cannot comment on whether or not the alleged behavior of Robert Halderman actually represents illegal conduct.

But contrary to the assertions of his legal council, his alleged conduct was certainly not an act of capitalism.

Frankly, I am tired of hearing terms like ‘capitalist’ and ‘entrepreneur’ used in efforts to downplay the seriousness of illegal and/or grossly immoral behavior. These types of words should be reserved for those who are truly worthy of being described as such.

 
The ‘Tiger Woods’ defence
Mr. Halderman is charged with first-degree grand larceny in connection with a failed attempt to secure payments of up to $2 million dollars from David Letterman in return for silence about the talk show host’s affairs with female employees (refer article). Allegedly, Halderman threatened to go public after the discovery that his ex girlfriend was one of the women involved.

In an attempt to have the charges dropped, Halderman’s lawyer, Gerald Shragel, compared his client to women linked to Tiger Woods (who were reportedly paid to keep quiet), claiming that “their behavior was capitalist, not criminal,” and that “(The) reality is that evidence of celebrity misdeeds has a significant market value.” (refer article,)

 
Blackmail not what capitalism is about
The question of whether Halderman’s alleged behavior indeed represents criminal conduct will be decided by the American judicial system in due course.

But was it capitalist behavior? No way.

Dictionary.com defines capitalism as:

“an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.”

Neither blackmail nor larceny are mentioned in any part of this definition. Nor, I doubt, would they be associated with the word in any other dictionary. They are not what capitalism is about and they have no place in any form of economic system, and though efforts on the part of defence council to downplay the nature of their clients’ alleged behavior are certainly understandable, I grow tired of the way in which concepts like capitalism get abused in the process.

The same applies to the concept of entrepreneurialism, a term all-too-often abused in describing the organisation of blatantly criminal or immoral operations for financial gain.

(Blackmail is defined as “any payment extorted by intimidation, as by threats or injurious revelations or accusations” and “the extortion of such a payment“)

 
Capitalism Vs Blackmail
Let’s have a look at a few differences between capitalism and blackmail:

Capitalism is an economic system. Blackmail and larceny are acts of criminal conduct.

Capitalist behavior serves genuine needs for end-consumers. Blackmail and larceny do not.

Capitalism appeals to those who seek reward for courage, initiative, diligence, hard work and sensible risk taking.

Blackmail and larceny appeal to the lazy and dishonest – those who seek to get rich quick via opportunistic behavior.

Capitalist behavior is legal in free-market economies. Blackmail and larceny are not.

Capitalist behavior (usually) contributes in a positive manner toward society. Blackmail and larceny do not.

The American judicial system will decide whether or not Halderman has breached the law. But regardless of the outcome, his alleged behavior is not what capitalism is all about.

Let’s leave words like ‘capitalist’ and ‘entrepreneur’ to those who are worthy of being described as such – those who seek reward through courage, initiative, risk-taking, diligence and hard work.

(Google Headquarters in Beijing - Image provided by M Weitzel via Wikipedia)

Given the complexity of the moral, ethical and business-case considerations involved, there are no easy or straightforward answers to the dilemma confronting Google with regard to the future of its Chinese operations.

But given the recent security breaches, the pendulum has swung a long way, and the case for leaving China – from both ethical and business case viewpoints – has surely grown much stronger in recent weeks.

 
Google’s announcement to review it’s Chinese Operations
As most of you will already be aware, Google released an announcement on January 12 to the effect that the company’s operations in China are under review, following: (a) the discovery of a highly sophisticated and targeted cyber attack on the firm’s corporate infrastructure, with the primary goal of accessing the accounts of dozens of human rights activists in China and elsewhere; and (b) a decision that the company is no longer willing to censor search engine results in China.

Although not saying anything to pre-empt the outcome, the announcement does make it clear that partial or complete withdrawal from the country is a serious prospect.

 
Previously, the company’s operations in China were OK …
Prior to the discovery of the attacks, Google’s approach toward China appeared to be sensible and pragmatic.

To be sure, the censorship of search engine results to which the company agreed in 2006 did go against one of the basic fundamental principles of the online world (freedom of expression and information flow).

But it was necessary. Without agreeing to censorship, operating effectively in China would have been virtually impossible (prior to the agreement, Google’s uncensored engine, Google.com, had apparently been blocked by the Chinese government on an intermittent basis – refer article), and any stand made by the company regarding censorship would almost certainly have cost it the chance to properly exploit opportunities within the country – a price which surely would have been too high given the size and potential of China as a market.

And from the viewpoint of Chinese netcitizens, any Google service, albeit a censored one, was better than none at all prior to the censorship agreement when the service was so frequently blocked.

 
… but the security breaches change everything
But recent events have shifted the pendulum a long way, and both the ethical and business cases for leaving have become much stronger.

Even now, ethical considerations are a long way from clear cut. Any withdrawal on the grounds of censorship would hurt Google’s Chinese staff and customers much more than it would the Chinese government. And even despite the recent attacks, human rights activists in China would almost certainly be safer using online services from Google than those provided by domestic Chinese firms.

Still, the company does now have to think long and hard about whether or not it can be confident about the secure provision of some services, especially in light of the apparent sophistication of the attacks. Given this, along with ongoing reservations about censorship, the moral case for withdrawal has grown stronger.

So too has the business case. Most obvious is the risk of backlash in rich world markets. Already significant given the contention surrounding the censorship issue, the risk to Google of backlash associated with the continuance of operations in China is bound to intensify, especially if netcitizens remain unconvinced about its ability to provide Chinese services without jeapoardising the security of human rights activists.

This matters. China represents only a tiny portion of Google’s worldwide operations (see below), and the effect of the company’s strong moral pulse as a source of competitive advantage in western markets should not be underestimated.

(Google’s Chinese operations derive about $300 million in revenue, compared to an aggregate figure $22 billion for its global  operations – refer article)

Besides, Google’s experience in China has always been problematic. The company’s market share in its core search business is languishing at fifteen percent (refer article), and outside of search, many of its other businesses continue to experience problems relating to government censorship (at present, You Tube, Picasa and Blogger are all blocked – refer article).

Add all this up and there might just be a fair case for withdrawal anyway – even if it weren’t for ethical considerations.

 
Conclusion
There are no straightforward answers to the questions facing Google over the future of its Chinese operations.

But for now, the pendulum has swung in favor of an exit – whether partial or complete.