Stopping others from Christmas evil

One of the functions of free markets is to provide private governance. Self-regulating markets reward good products and services and punish the bad.

However, sometimes buyers don’t have enough information to make good choices. In response, entire companies arise to correct this lack of information — stereo magazines, camera magazines, Consumer Reports, etc. etc. Intermediaries are also supposed to play this role. Reputable retailers, wholesalers and distributors select reputable products and stand behind them.

Of course, this is all fine in theory, but often breaks down in practice. The self-regulators (like government regulators) get lazy, corrupt, or just make a mistake.

And then we have advertising. TV and radio stations accept ads for weight loss programs, male enhancement herbal supplements, and all sorts of products where the “too good to be true” probably is.

All of this being a roundabout way of asking: How much of an obligation does Google have to reject fraudulent ads? Does its promise to “do no evil” require it to avoid complicity in the evil of others?

Do we expect more or less out of a search engine than a TV station, TV network or the New York Times? Does its market dominance give it special obligations?

To me, the Google business model makes it uniquely vulnerable to this problem. Its primary ethos of making its business scalable with no human intervention — and thus no human judgement — seems to be devoted to doing as little governance as possible.

From what I’ve seen thus far, it’s Insulted — and fights back— if the SEO crowd games its algorithms, going so far as to misappropriate the e-mail term “spam” to tar such efforts. It has also taken steps to block searches that lead to malware sites.

However, it seems to be less intent on blocking companies that pay for ads, and then use the traffic generated by those ads to perpetuate age-old examples of deceptive business practices.

All this came up earlier this month when I was Christmas shopping (for myself). My digital SLR is almost 10 years old. My wife and I have been talking for several years about replacing it because the CPU is too slow to take bursts of pictures of our daughter at sporting events.

Back in February, I’d identified the Nikon D60 as the likely replacement, and so I google’d “Nikon D60”. This gave me a lot of paid links to firms offering to sell me a camera, and links to sites offering me pointers to the best prices on a camera.

Virtually all of the sites that I found directly and indirectly were dishonest to some degree: they had no intention of selling me a D60. (The one exception was Amazon, which would be glad to sell me one today).

The problem with the search is that since my research in February, Nikon discontinued the D60 and replaced it with the D3000. So when Target bought an ad for my search, they were gambling that when I came to their site, I’d buy another camera. A few other reputable companies did the same thing.

After that, what was left was companies that had no intention of selling me a camera. Some of these advertised directly, some were listed by a site called Compare247.us and some were even listed by a shopping.yahoo.com search that showed up.
Going to these sites gave me many examples of “too good to be true” prices — because they were. This reminded me of college days when some of the ads in the back of Popular Photography were for reputable mail-order camera stores like Adorama, B&H, Executive and 47th Photo, but among the remainder were companies that were not selling what they advertised or would out-and-out rip you off. (Pop Photo had specific policies for reporting such problems, and over time seemed to weed out the worse offenders).

It turns out that a UC Berkeley alum named Dave Michael (possibly a pseudonym) runs a blog devoted to rooting out fraudent camera website “deals.” (Alas, to monetize all the traffic he’s getting, he created a separate blog plugging good camera prices that he sees on Amazon.)

So when I went to investigate what was known about these “too good to be true” prices, I kept finding Dave’s website, with articles talking about why these sites are dishonest and full of user comments about their own bad experiences. This included postings on Supreme Camera, SmartChoiceCameras.com, Thunder Cameras, and Need4Digital.com. All of these were mentioned by Google or comparison sites linked by Google.

Although Google is the biggest offender, it’s not as though its competitors are blame free. Yahoo Shopping also sent me to Supreme Camera and Need4Digital.com. In fact a Yahoo search for “Nikon D60” this morning (Dec. 24) found another paid ad for Need4Digital.com.

With its billions, Google can’t claim they don’t have the resources to investigate complaints. However, their AdWords complaint process seems to worry about other types of problems. For example, if a competitor is clicking on your page to inflate the commission you pay, Google offers advice on how to report “invalid clicks.” In fact, Google’ing “fraud” on the AdWords site talks about this so-called “click fraud,” not AdWords sites that are fraudulent.

Dave’s site has apparently come to the attention of state and local regulators who have been using it to shut down the most obvious frauds. He has also asked Google why they are not doing more. On October 28, he posted this plea on his blog:

Dear Google: Despite the State of New York’s crackdown, the bait and switch websites continue to pop up, and they use Google Adwords to lure unsuspecting Internet users into their fraud. With that in mind, I have an offer. Why don’t you flag all new applicants to your Adwords program that plan on advertising either cameras or camcorders, and then do some research. If they are brand new, put them on probation. Heck, send me their names and I’ll research them for free. In the long run, it’s better for Google not to let these guys use your service to commit fraud.

So in the end, what responsibility does Google bear for the dishonesty of its advertisers? How much effort should it exert towards rooting it out?

I think it can and should do more. If that means paying actual human beings to investigate the most egregious cases, then so be it.