Google faces privacy issues after ruling

By Stephanie Bodoni BLOOMBERG NEWS | Saturday, July 5, 2008

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Google Inc., owner of the YouTube video-sharing Web site, may be exposed to heightened privacy complaints from Internet users after a U.S. judge ordered it to give Viacom Inc. a database about online viewers.

Google was ordered three days ago to turn over records of videos viewed on YouTube, the log-in names of viewers and their computers' Internet addresses. Google already faces scrutiny over its storage of user data in the U.S. and Europe.

"The chickens have come home to roost for Google," said Simon Davies, director of Privacy International in London. "If they were going to unnecessarily keep this information, there was always the chance someone was going to grab it."

Viacom, owner of Comedy Central and MTV television networks, wants the information to find out if YouTube viewers watch copyrighted shows in an effort to bolster its $1 billion infringement lawsuit against Google. The ruling may lead some Web surfers to avoid using Google, which makes money based on traffic to and from its Web sites.

Google, owner of the most-used Internet-search engine, has resisted attempts to get at its troves of user data. In 2006, the company fought a U.S. subpoena for months as it sought to assure users their search records weren't easily accessible. Google founder Sergey Brin said it's the Mountain View, Calif., company's "obligation" to protect users' privacy.

"We will ask Viacom to respect users' privacy and allow us to anonymize the logs before producing them under the court's order," said Catherine Lacavera, Google's senior litigation counsel.

Viacom "has not asked for and will not be obtaining any personally identifiable information," the New York company said. Any information obtained "will be used exclusively for the purpose of proving our case against YouTube and Google."

Judge Louis Stanton's ruling may signal the start of a willingness to favor copyright holders over privacy proponents, following years of court decisions making it more difficult to get that kind of information, said William Heller, an intellectual-property lawyer at McCarter & English LLP in Newark, N.J.

"This could represent a shift in what courts are willing to do," Mr. Heller said.

The decision may trigger further privacy-related problems for Google in Europe, analysts and lawyers said.

Privacy International will complain to data-protection officials from the 27 European Union nations by Monday, according to Mr. Davies.

The EU's so-called Article 29 Data Protection Working Party recently completed a one-year probe into how search engines store user information. The group concluded that companies such as Google, Microsoft Corp. and Yahoo Inc. must cut the time they keep the data to comply with EU privacy laws.

The group had earlier told Google it may be violating EU privacy laws by preserving user data for as long as two years, spurring Google to trim the storage period to 18 months. Microsoft and Yahoo followed shortly thereafter.

"If that database includes information on European YouTube users - and it seems it includes worldwide users - the data-protection authorities in Europe would certainly not approve," said Quentin Archer, a lawyer with Lovells LLP in London.

"Google is in a tough spot. They must comply with the court order, but there's a lot at stake in doing so," said Greg Sterling, an analyst at Sterling Market Intelligence in San Francisco. "If Google fights for its users' privacy, it could be seen as a champion of privacy."

Mr. Archer said the United States doesn't have any general rights of privacy, such as in Europe.

"Google faces potential fines, private damages claims and, most importantly, reputational harm if users' personal data are shared with Viacom in violation of EU data-privacy rules," said Wim Nauwelaerts, a lawyer in the Brussels office of Hogan & Hartson LLP. "The mere fact that a U.S. court has ordered the transfer would not provide an adequate legal basis for disclosing European users' personal data."

Mr. Davies, the director of Privacy International, said the case could affect all Internet companies that operate globally.

"The whole transfer of personal data from the EU to the U.S. is predicated that there is some level of European-style protection," he said. "If we can't trust U.S. courts to protect that, and if we can't trust Google to be honest and transparent, all deals are off."

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