by Laura Rohde and Peter Sayer

Privacy – On Eve of IPO, Google Gets Earful on Gmail Plan

Jun 01, 2004 4 mins

The folks at Google are used to searching the wide Web world. But when they announced a new free e-mail service that scans users’ e-mail text so that relevant advertising can be inserted into the messages, it was users from all over the world who came looking for Google.

What sounded like a good idea to Google’s leaders (and may still turn out to be a valuable advertising vehicle) brought howls of protest from consumer privacy and civil liberties groups in Europe and the United States, urging Google to rethink its proposed service called Gmail.

Google announced Gmail April 1 and cited it as an asset in the company’s IPO filing April 29. Gmail as planned is a free, Web-based e-mail service similar to Microsoft’s MSN Hotmail and Yahoo Inc.’s Yahoo Mail, though Gmail’s 1GB of storage is much more than these other popular free services offer. Another difference: Google plans to scan e-mail and add advertisements that its systems identify as relevant to the messages. Additionally, the Gmail privacy policy warns that messages, including those “deleted” by a user, may still be stored in the system, even long after users have closed their accounts?something that some privacy campaigners believe may be in conflict with U.S. and European data protection and privacy laws.

“This is one of the hottest issues we’ve ever dealt with in terms of Internet issues,” says Simon Davies, director of London-based advocacy group Privacy International.

In April, Privacy International filed a formal complaint with the U.K.’s information commissioner office (ICO) requesting that action be taken against Gmail. The group plans to file complaints in other European countries, Davies says. Additionally, Democratic Sen. Liz Figueroa of California says the privacy issues are leading her to consider proposing legislation to stop Google from launching its Gmail service in its present form.

As these notes of protest arise, Google seeks to assure the Web-going public that its Gmail service is in the early testing phase and that it is still taking shape. “Google has the highest regard for the privacy of our users’ information. We have taken great care to architect Gmail to protect user privacy and to deliver an innovative and useful service. While we’re still in a limited test of Gmail, we welcome and appreciate feedback on how we can improve the offering for our users,” says a Google spokesman.

Google Vice President of Engineering Wayne Rosing says that a Gmail user’s name is not sent to the ad server, and when the system scans the e-mail, it does not look at the “to” or “from” fields, only the subject and body of the mail.

An ICO spokeswoman says that as long as Google “makes it clear that it is monitoring e-mail usage and passing that information on for marketing purposes, there shouldn’t be a problem.” The ICO spokeswoman adds that representatives from Google working with the ICO were surprised by the reaction to its proposed e-mail service. “I don’t think they thought this was going to be a problem,” she says.

The European Commission may end up looking at Gmail, according to Peter Sandler, a Commission spokesman. One potential problem with Gmail, Sandler says, is the “opt-in” directive that was added to the statute books of the E.U. member states last October. The measure puts the onus on companies to obtain permission from individual users to send them unsolicited commercial e-mail. “There is an obligation of member states to make sure that the confidentiality of messages are insured. So that could have implications for companies that are scanning and tracking information,” Sandler says.

Meanwhile, Google will have weightier messages to interpret. Cofounders Sergey Brin and Larry Page, in their IPO filing slated to raise $2.7 billion, vowed to resist market pressures to focus on long-term goals. We’d like to read the e-mails buzzing around Wall Street on that one.