Google Learns That When No One Trusts You, Even Crap Charges May Stick

Last Updated Jun 7, 2010 2:00 PM EDT

Google (GOOG) faces class actions over having collected private information from Wi-Fi networks. Attorneys in one of the suits claim a patent application proves that Google gathered the data intentionally, and not accidentally as it has claimed.

Although this claim seems false, it doesn't matter. When people lose trust, practically any accusation, whether true or not, sticks like superglue. The question is whether the lesson will finally sink in at Google's headquarters.

Google has admitted that it sampled data from Wi-Fi networks -- after an initial inquiry by German authorities. Although the company claims it was all a mistake, no business gets to screw up this badly with impunity. Regulators in Europe and the U.S. are investigating. Lawsuits have already lined up -- at least seven class action in the U.S. alone, so far.

Now the plaintiffs' lawyers in one claim that a patent application proves that the program was deliberate because Google was interested in determining the location of people using wireless devices. I think the lawyers have badly misread the document. Here's my take from January when I first came across the patent application:

But according to a patent application number 20100020776, Google (GOOG) has been working on methods of deducing locations based on packet analysis. This would give a company a route around carriers and the ability to make location information available to its own advertising customers.The application, which looks at all forms of wireless, including cellular carrier networks, Wi-Fi, and Bluetooth, discusses estimating the locations of wireless access points (whether a Wi-Fi hot spot or a cellular tower), determining the accuracy of the locations, and then deducing the user's position based on these, for the purpose of location-based services.
Google could get packets of data from wireless users, many of which are on mobile devices, through offering services, and then could examine the routing information to estimate location. To go out and physically collect the data from Wi-Fi networks themselves would be a waste. First, you'd already know where the networks were, because you'd be within a few hundred feet just to get the signal. Second, devices that are roughly fixed in place -- for example, people taking laptops from one part of a house or business to another -- are tied to an IP address and, as a result, a physical location. Third, much of the smartphone traffic, the real point of interest, arrives at cell towers, not at Wi-Fi access points.

The whole idea of the Google patent application is to estimate the location of a mobile device on the fly, based on packet data. The recorded information would seem to do little to no good, other than maybe associating a given Wi-Fi access point with a rough physical location, and that isn't the private data at issue.

However, the truth no longer matters. Google has already flubbed its response to the problem. If this were an isolated issue, things would be different, but it's only one in a long line of concerns about how the company handles and uses personal data. The publicity has badly damaged Google's reputation and makes any new accusation seem that much easier to believe. You can bet that most people who run across the lawyers' claims won't expend the energy to read the patent, let alone consider whether the charge has any logical base.

That's the problem with damage control. At a certain point, it becomes a positive feedback loop. Executives try to keep taint at arm's length, which causes greater mistrust and encourages more people to attribute additional misdoings to the company. Ironically, by not providing full, truthful, and accurate disclosure from the beginning, Google has effectively made the validity of more accusations all but unimportant.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.