Entering Nixonland: FCC Fines Google for "Willfully" Obstructing Investigations

It's not the crime, it's the cover-up.

You'd think most people would have learned that lesson of Watergate, but Friday's decision by the Federal Communication Commission to fine Google $25,000 for "willfully" ignoring subpoenas and delaying investigations into the company's "wi-spy" scandal should be a 25-page wake-up call that Google is accelerating its legal meltdown.

The $25,000 fine is chump change for a company with $40 billion in annual revenue, but following so soon after the $500 million fine the company agreed to as settlement for promoting illegal pharmacies online -- including colluding with a felon who fled to Mexico to set up scam sites selling steroids -- you'd think the leaders of Google would be making contrite statements of putting problems behind them and complying with the law in the future.

Not so much. Here's Google co-founder Sergey Brin in an interview with the British newspaper The Guardian: "If we could wave a magic wand and not be subject to U.S. law, that would be great."

This is the arrogance of a company that has repeatedly violated the law and treats half-billion-dollar fines as the costs of doing business, while their only comment seems to be sadness that they were caught or were subject to the law in the first place.

The Damning Details of Delay: What's most damning about the FCC Friday ruling is the detail upon detail of Google management lies, restatements when caught in the lies, delays in providing information, and outright maneuverings to block access to key witnesses in the probe.

As the FCC noted in its ruling, it's not as if the matter was of minor public interest. Privacy authorities in countries around the world were outraged when it emerged that Google has used cars driving down streets, supposedly to build pictures for its Street View maps, were covertly being used to map residential Wi-Fi hotspots and, more disturbingly, were downloading data from home communications, including personal emails and data revealing everything from people's medical histories to their sexual preference to marital infidelity. Multiple nations have found the company violated national privacy laws.

Yet Google ignored almost every initial request for information by the FCC until forced to comply.
  • In response to the initial November 2, 2010 request by the FCC for information on the Wi-Fi data collection project and the names of individuals involved, the company included no emails and admitted it had "not undertaken a comprehensive review of email or other communications" and failed to identify any individuals involved in the wi-spy operations. The company also refused to provide a copy or access to the Wi-Fi data involved; the FCC only abandoned pursuit of that data from Google because other countries finally obtained data and published reports on the kinds of data Google had collected.
  • After a follow-up FCC request on March 20, 2011 for more information, the company produced only eight emails and a few names of people involved in the project, but refused to certify that it had done a "comprehensive search of all materials within the company's possession."
  • On August 18, 2011, the FCC sent a Demand Letter with a request for information under threat of subpoena. Google finally made some of the employees involved available for interviews, but the key employee, so-called "Engineer Doe" -- who wrote the code that collected the Wi-Fi personal data and supposedly inserted it into cars all over the globe without management knowledge -- invoked his Fifth Amendment right against self-incrimination and declined to testify.

Surveying this nearly year-long delay in responding to Commission requests for information, the FCC declared "Misconduct of this nature threatens to compromise the Commission's ability to investigate violations of the Communications Act and the Commission's rules."

The $25,000 fine was assessed based on the FCC's finding that "Google's failure to cooperate with the Bureau was in many or all cases deliberate."

Ruling Could be Prelude to More Pain for Google: There are two other notable things from the ruling.

First, the snark. Responding to Google's initial claims that it was too burdensome to find the information requested, the ruling snarked: "Although a world leader in digital search capability, Google took the position that searching its employees' email 'would be a time-consuming and burdensome task.'"

When agencies mock a company, you've really kind of pissed them off.

Second, there's "Engineer Doe" taking the Fifth Amendment. This mystery man supposedly single-handedly placed code in cars driving down the streets of five continents and collected the personal data of millions of households -- all without any higher-ups at Google knowing what he was doing.

Google may be taking some comfort from Friday's ruling, since the Commission itself declined to take enforcement action against Google for violated the federal Wiretap law for illegally intercepting the personal communications, but that was based partially on the FCC's "inability to compel an interview of Engineer Doe [in order to determine] whether Google did make any use of any encrypted communications that it collected."

But that raises the question of why Engineer Doe was not offered immunity? The answer could be that some other enforcement agency, possibly the Department of Justice, is either pursuing criminal charges against Engineer Doe or planning to use his or her immunized testimony themselves to take on Google directly.

So Google avoiding the bullet on FCC enforcement action on Friday over the wi-spy scandal may be less than meets the eye. It remains to be seen if the story of the mysterious Engineer Doe may yet appear in a courtroom.

Google's Coming Meltdown? With the best-intentioned and best-behaved caretaker, the unprecedented amount of personal and private data controlled by Google would raises concerns.

But the Friday ruling by the FCC just adds to the picture of Google as a law-breaking cowboy company that repeatedly violates user privacy for profit, condones illegal pharmacies and crooked "loan modification" firms preying on its users, uses its dominance to muscle allied manufacturers to help it spy on users, and, with this FCC ruling, stonewalls the government when caught acting improperly.

Maybe the company will keep skating above these problems, but this degree of illegal activity combined with the arrogance expressed by Google's leaders promises what could be an epic corporate meltdown in the future.