Google's Lobbying Budget Sparks Concerns
Posted Friday 1st May 2009 by Tobias in SEM News.
In January the US based Consumer Watchdog group sparked concerns regarding Google’s lobbying activity surrounding the Obama administrations’ stimulus package. They claimed that Google was lobbying to relax privacy laws which would enable them to sell private medical information that was hosted on its Google Health application.
Google retorted claiming that these accusations are “100% false and unfounded” , adding “Google Health does not sell medical data”. A letter this week from Consumer Watchdog stated that it never said that Google Health sold medical data, but that its lobbying activity was pushing to exclude it from the Health Insurance Portability and Accountability Act [HIPAA], positioning itself in a place to not be in any breach of legislation if it decided to sell medical data.
The figures have been released regarding Google’s lobbying activity and it has been revealed that Google spent USD 880,000 on lobbying activities, specific to the stimulus package. Although this information has been released and is a matter of public record, there remains a lack of transparency surrounding the actual activity of the lobbying agents hired by Google.
There were a number of agencies accepting money to lobby in Washington on behalf of Google, all stating the healthcare stimulus package as their focal point. However one company stands out; the Podesta Group Inc received USD 150,000 to represent Google’s interests for “health information technology” and “online privacy”; this edges towards confirmation of Consumer Watchdog’s original concerns.
The argument is not whether Google will sell medical data but that it was lobbying to remain unrestricted by the privacy legislation of the HIPAA and by Consumer Watchdog’s account it has succeeded in doing so. In a letter to Eric Schmidt, the CEO of Google, Consumer Watchdog states that Google Health is not restricted by the privacy provisions included in the HIPPA – the only stipulation being that they inform users when there has been a security breach.
Consumer Watchdog has challenged Google to make public all of its lobbying activities to prove that its intentions were not to position itself in a place where it could legally sell privacy data. As the letter highlights, the issue is not whether they promise to customers that they will not sell medical data, it is whether they can do so legally.
This lack of transparency within Google’s activities seems to be endemic of their corporate existence. CVS Caremark recently became Google Health’s newest partner and are seasoned masters at deceptive business practices. They are one of the largest companies in the US, boasting an annual sales figure in excess of USD 87,472 million. It has a list of lawsuits and a reputation for lack of transparency in its profit margin.
The most recent example was reported by Reuters at the beginning of March, outlining a case at Ferris State University. Change to Win sued the University for release of a government contract outlining the agreement between CVS Caremark and Ferris State, due to concerns about the profit margins the pharmacy benefit management [PBM] company had employed. Reuters had this to say about CVS Caremark:
CVS Caremark are effectively a middle man for the pharmaceutical industry, with one thing in mind: profit. They drive the price of pharmaceutical products up and due to their size and lobbying power, contracts such as the Ferris State University case are commonplace. The PBMs are supposed to be acting on the behalf of the consumer to drive the price of pharmaceutical products down, however over recent years, companies such as Caremark CVS had done the opposite.
In 2008 CVS Caremark settled a multi-state lawsuit [by paying USD 38.5 million] alleging they had not passed rebates onto consumers. This recent Ferris State case is thought to be the tip of the iceberg and it is hard to see where a profit based company would assist with the seeming not-for-profit motives associated with Google Health’s objectives. Additionally, it is hard to see why Google would align itself with such an organisation unless their objectives were aligned.
The recent ‘teething problems’ with Google Health, where insurance codes were inaccurate and adversely affecting diagnoses and policy rates, have been responded to by Google by new procedures. However Google Health is now in a position where it can legally sell medical data and is partnered with a company with a history of lawsuits for deceptive business practices which could potentially profit from the information.
is doubtful if Google will open up its lobbying activity for public record, however it would restore a great deal of faith if they did. Their move toward covert business tactics is far removed from their innovative early days. Their blog posts read more like corporate PR releases every day, citing the multitude of new initiatives from autistic children to saving the planet, which seems increasingly like window dressing for corporate business activity; so much for a move back toward their core business of search and ads.
The story continues……
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