Google and Europe at odds over privacy

BERLIN — When Google began hiring in Zurich for its new engineering center in 2004, local officials welcomed the U.S. company with open arms. Google’s arrival is still bearing fruit for Zurich: 450 employees, about 300 of them engineers, work in Google’s seven-story complex in a converted brewery on the outskirts of the placid mountain metropolis.

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[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,4,5,7,8,9,10,11,12,13,14,17″ ihc_mb_template=”1″ ]But almost five years into its expansion into Europe — where it has a headquarters in Dublin, large facilities in Zurich and London and smaller centers in Denmark, Russia and Poland, among other countries — Google is beginning to bump up against a web of privacy laws that threaten its growth and the positive image it has cultivated as a company dedicated to doing good — its unofficial motto.

In Switzerland, data protection officials are quietly pressing Google to scrap plans to introduce Street View, a mapping service that provides a vivid, 360-degree, ground-level photographic panorama from any address. Swiss privacy law prohibits the unauthorized use of personal images or property.

In Germany, where Street View is also not available, the simple process of taking photographs for the service violates privacy laws.

“The privacy issue will likely become increasingly important for Google as it continues to offer new services in Europe,” said Dirk Lewandowski, a professor of information sciences at the University of Applied Sciences in Hamburg and an expert on search engine technology. “For the moment, most consumers are not aware their data is being used by Google in some fashion. But I think as people become aware of this, there could be protests that Google will have to address.”

The conflict does not end with Street View, which so far in Europe depicts only major cities in France, Spain and Italy.

Data protection advisers to the European Commission in Brussels are questioning Google about how long the company retains user logs — the files the company compiles of queries typed by individuals into Google search fields. A panel of EU national regulators called the Article 29 Working Party wants Google — as well as Yahoo and Microsoft’s MSN Search — to purge the records after six months.

Google says it needs the data for nine months to adjust its search engine to reflect the constant changes in contextual meaning generated by news and events. Before October, Google retained the records for 18 months in the EU. Yahoo is retaining its records for 13 months and MSN, for 18 months. EU officials are trying to persuade Google and the others to comply but have not ruled out asking the commission to intervene.

Nelson Mattos, a vice president responsible Google’s 12 engineering centers in Europe, the Middle East and Africa, said he was confident that the company would reach a compromise with the authorities. In an interview in Zurich, Mattos, a Brazilian who was educated in Germany and spent 15 years at International Business Machines before moving to Google in 2007, said Google’s Street View would be applied in Switzerland and Germany “at some point.” But he declined to say when that might be.

“Google is committed to making sure the data of its users is well-protected and not misused,” Mattos said. “Europe has a history of innovation. Where it has not always done as good a job in my opinion is in follow-on innovation, in commercializing the innovation. If you restrict too much how a company like Google can innovate, that will restrict the follow-on benefits in Europe.”

To enhance its profile among European decision makers, Google has increased its presence in major government centers around Europe. The company now has enough employees to fill three floors of an office building in downtown Brussels. In five years, Google has hired about 3,500 people in Europe for its regional headquarters in Dublin; its large offices in London and Zurich; and smaller centers in Krakow, Poland; St. Petersburg; and Aarhus, Denmark.

Many of the company’s most recent innovations, like elements of its new Chrome Web browser, an analytical tool called Google Trends and a mass transportation function called Transit, have been conceived or improved in Europe.

The engineering center in Zurich helped speed up the functioning of Video ID, an automated video search service that allows video and music copyright owners to sweep YouTube, the largest online Web video-sharing site, to detect illegal uploads. Google bought YouTube for $1.65 billion in October 2006.

Introduced year ago, Video ID is being used by 300 companies, including Lion’s Gate Films, Sony Music Entertainment and the Italian broadcaster RAI. In 90 percent of cases, said Patrick Walker, director of partnerships at YouTube in London, companies choose not to block the illegal footage but to run advertisements next to the homegrown uploads, splitting the revenue with YouTube.

“It’s the best video search technology available today on the market,” Walker said. “It has basically allowed all types of rights holders for the first time to protect their content on the Web, and in most cases, has opened up a whole new way for companies to make money off of their inventories.”

Some of Google’s technical advances are starting to impress European policy makers. At a conference in Brussels in October, the European commissioner for Internet issues, Viviane Reding, said Video ID “ensures that rights owners regain sovereignty over the exploitation of their work.”

In Switzerland, Google has so far agreed to block Street View, said Bruno Baeriswyl, the director of Privatim, the privacy agency for the Canton of Zurich.

“But we don’t know how long that is going to last,” he said.

The data protection agency Edb is also in talks with Google because a Swiss law that took effect Jan. 1 requires all companies in Switzerland that maintain databases on individuals — as Google does — to disclose to the agency how they manage the information.

“We have been in contact with Google about different topics,” said Eliane Schmid, a spokesman for the agency, called the Eidgen”ssicher Datenschutz und TMffentlichkeitsbeauftragter. “These are initial contacts and as such not of an official nature. Therefore, you will understand that any details remain confidential for the moment.”

In Germany, opposition to Street View is more visible. In Kiel, a town on the Baltic Sea coast, data protection officials are threatening Google with fines and are distributing stickers for homeowners to display advising Google’s photographers against making pictures of their property for Street View.

“What Google is doing with Street View violates German law,” said Marit Hansen, deputy director of the Unabh”ngiges Landeszentrum fr Datenschutz in Schleswig-Holstein, the state in which Kiel is located. “It’s not enough that Google’s Street View is not yet available in Germany. The simple photographing is in itself a violation.”

European consumers appear to be less worried than some regulators about the potential loss of privacy. ComScore, a research firm in Reston, Virginia, found that 8 in 10 Europeans used Google for online search queries.

“The data protection agencies tend to be extreme,” said Peter Heinzmann, chief executive of a Swiss company that makes software for Web cameras called CN Lab. “But most people are voluntarily giving information to Google because they think the benefits outweigh the risks. So why restrict innovation?”