Reference no: EM132222720

Google’s ease of use and superior search results have propelled the search engine to its number one status, ousting the early dominance of competitors such as WebCrawler and Infoseek. Even later offerings by other large tech companies using comparable algorithms, such as Bing by Microsoft, have failed to make significant inroads, with Google retain- ing an impressive 65 percent global market share. As Google gained popularity, it began expanding into a number of different ventures, including multiple advertising platforms, a digital book publishing space, and social networking. It has spent billions to acquire hundreds of companies in a variety of industries, from robotics to smart home devices to intangibles such as voice recognition technologies. Approximately 3.5 billion searches a day are performed through Google’s search engine. As is common with most large companies, Google has experienced its share of ethical issues. Its mantra “Don’t Be Evil” was called into question after it allowed the Chinese government to censor aspects of some of its sites in order to enter the market. Google has also been investigated and sued by multiple governments based on concerns that its widespread reach and market power violate antitrust laws. The hot ethical topic on many Internet users’ minds, however, is the company’s approach to Internet privacy and the collection of user information. To improve the effectiveness of its services, including customized search results, targeted ads, and more precise integration of its various offerings, Google tracks and leverages user information without explicit permission (although Google’s privacy statement informs users about the record- keeping, and Google does allow users to opt out of some forms of tracking). Such tracking is common practice for Internet companies, but Google’s deep access to so many different types of user information, as well as the seemingly dismissive attitude it has sometimes exhibited toward the public’s concern, has led people to question whether Google violates its users’ privacy. In light of the increasing amount of cyber attacks and the government’s determination to crack down on these illegal attacks, consumers also worry their private information, tracked and stored by Google’s algorithms, might be compromised. This case analyzes Google’s efforts to be a good corporate citizen and the privacy issues the company has faced. The analysis starts by providing background on Google, its technology, and its initiatives. Google’s core principles will be discussed as well as its efforts to be a socially responsible company. We then discuss the criticisms levied against Google, including its initial attempts to break into the censored Chinese market, it's tracking of users, and more recent changes to its privacy policies. We examine how Google has sometimes clashed with government authorities. Finally, we review some of the legal methods that have been proposed to regulate Internet data collection practices and Google’s response to the proposals.

Google adopted a decentralized approach to empower its employees. Its corporate headquarters in Mountain View, California, is known as the Googleplex and consists of a campus containing such amenities as on-site gymnasiums and swimming pools, an outdoor volleyball court, laundry services, and even high-tech “nap pods” for optimized downtime. When Sergey Brin and Larry Page founded the company, they recognized employees had to put in long hours to make the company not only successful but flexible enough to adapt to the changing environment. Thus, Google employees are provided with benefits to make the complex their second home. The company strives to make its corporate culture fun and innovative. In fact, two of its core principles, “You can be creative without a suit” and “You don’t need to be at your desk to need an answer,” demonstrate the company’s divergence from a more formal office environment. The company’s 10 core principles are outlined in Table 1. At the same time, Google works to ensure it has top talent at the company. While it reinvents the office experience, it also takes different tactics in recruiting to ensure it hires the most creative, talented individuals. For instance, Google recruiters take a bottom-up approach when reading re´sume´s. Recognizing that top items such as education and work experience do not always guarantee the applicant is innovative, some Google recruiters start at the bottom of the re´sume´ where applicants put more creative information. This type of mentality—being more concerned with hiring creative people than those who excelled in school—meshed well with Google’s famous informal policy of allowing employees to spend up to 20 percent of the workweek pursuing their own unique projects. Not only did this policy make employees feel empowered, it led to some of Google’s standout products including e-mail and key improvements to AdSense. However, in 2013 this “20% time” policy was largely discontinued after Google determined it was splitting its focus among too many projects. It decided to commit itself to put “more wood behind fewer arrows.” Nevertheless, Google’s innovative company culture is one of the major reasons why it has become successful in so many different market niches.

Being a large company, Google has many risks and ethical issues it must constantly address. In many ways, Google helped advance ethical conduct in the web and technology industries. Google has been named among Ethisphere’s World’s Most Ethical Companies for six years running due to its contributions to the community and the environment. The company also consistently ranks among Fortune magazine’s “100 Best Companies to Work for” because of its fun and innovative work environment. At the same time, Google has been accused of questionable activity, from antitrust issues to copyright infringement. For instance, Google’s announcement that it would be digitizing the collections of several prominent libraries and making them available online through Google Books sparked outrage from publishers who still owned the copyrights. Google only made books out of copyright fully available—for books still within copyright, just small snippets could be viewed—but the Author’s Guild sued Google over it, arguing the arrangement was without the permission of its members and violated their copyrights. Google eventually won that fight, with a judge ruling that Google’s actions fell under the fair use of copyrighted material. Google has also faced intense antitrust scrutiny from the European community. Competitors in Europe claim Google uses its dominant market position to promote its own offerings and demote rival results in search listings. In 2010 the European Union (EU) began investigating Google’s practices. Google proposed concessions and business changes.

For the sake of brevity, this case will focus on one major ethical issue Google has continually wrestled with as it seeks to expand its reach: privacy. The advent of the Internet and mobile technology provides so many opportunities for stakeholders that many do not realize the cost for this information might be significant portions of their privacy. Many consumers are shocked to find that web companies such as Google and Facebook track their online activity and use this information to tailor advertisements or sell to marketers. Other consumers feel that Google’s use of their personal information is a small price to pay in exchange for access to the company’s superior services. For Google—which offers so much free content and gets most of its revenue from advertising—this information is extremely valuable to its continued business success. Google’s privacy policy details what information it collects and how it uses that information. For instance, Google shares information with its partners but claims this information is non-identifiable to specific users. Google says it does not share any identifiable information with outside parties unless it has user consent. Despite Google’s attempts to be transparent, there are ethical gray areas regarding the collection and use of data. Because there is still little legislation regulating how Internet companies gather and employ user information, it is tempting for firms to push the limits on privacy. Going too far, however, creates reputational and legal problems. Google has sometimes appeared to take a cavalier attitude toward privacy. For instance, former CEO Eric Schmidt was quoted as saying, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” In 2007 Google was given a “hostile to privacy” rating by watchdog organization Privacy International. Although Google is the most popular search engine, one poll found that 52 percent of Google users have concerns about their privacy when using it. This could be a potential obstacle for Google since consumer trust plays a big role in how they interact with a company. The following sections discuss some of the major privacy issues Google has experienced.

Google’s success story is unparalleled among search engine providers. The company started off as a small search engine and ranking system and has become one of the most profitable Internet companies in the world. Today the company is the owner and provider of products that go above and beyond simply a search engine. While there might be a risk of Google overextending itself, the company has a talent for making highly profitable acquisitions that increase its global reach. As a way to manage its various businesses, in 2015 Google created a new publicly traded holding company called Alphabet run by Google founders Larry Page and Sergey Brin. Google was made a subsidiary of Alphabet with its own CEO. The founders believe that developing a holding company and “slimming down” Google to focus more on its Internet businesses will be beneficial for the firm in the long run. Google has made itself into the epitome of a “best company to work for.” The benefits Google offers employees are extensive, and Google empowers them to make decisions to improve the company’s operations. The company has taken a strong stand on green initiatives and supports technologies to address global challenges. Google’s 10 core principles provide a blueprint for how employees should conduct themselves within the company, and its “Don’t Be Evil” mantra has become a popular yardstick to guide Google’s actions. On the other hand, Google has faced challenges in privacy, many of which continue to this day. Google is forced to draw a fine line between using user information to generate revenue and violating user privacy. Because Google is able to offer targeted advertising to advertisers through its collection of information, the company can provide quality Internet services to its users for free. At the same time, Google has committed questionable actions that seem to infringe on user rights and has encountered resistance from governmental authorities on many privacy-related initiatives.

Essay Questions

1. Has Google implemented a strategy that serves all stakeholders?

2. How can Google respect privacy and still maintain its profitability?

3. How will increasing global regulation of privacy affect Google’s operations?