Technology

Google's Brazil Headache


Enter the words "Brazil" and "Orkut" into a Google (GOOG) search bar and it takes less than half a second to come up with about 3,640,000 results. A search on Google Images cranks out 588 in the same amount of time. Even Google Maps gives up 83 goods.

But ask people at Google's Brazilian unit about the legal troubles surrounding Orkut, the Google social networking site that has become an Internet phenomenon in South America's largest country, and the answers are less substantial.

COMPLAINTS OF ABUSE. Specifically, why isn't Google more active in going after the alleged racists, pedophiles, and drug dealers who have created pages on Orkut, Brazil's most popular relationship site? Human rights group Safernet has passed more than 100,000 complaints to police about Orkut this year alone, says Safernet President Thiago Tavares. Almost half of the complaints were about child pornography and thousands more concerned hate crimes, violence, or the mistreatment of animals.

Google says it removes the offending pages when it is informed of them, but Brazilian prosecutors say that is not enough. They claim the abusers simply create more pages, and now they want Google to produce IP addresses and other data that can lead police to those responsible.

A judge agrees, and on Aug. 31 gave Google 15 days to hand over the info or face a daily fine of 1.9 million reais (US$900,000). That decision puts Google in a tight spot. The company has refused to give up details about Brazilian users because authorities incorrectly addressed their court documents to Google’s Brazilian subsidiary, rather than the U.S. parent company that hosts the servers and the relevant data.

NOT A TECHNICALITY. That's no mere technicality. Officials worry that if they hand over data without demanding the proper paperwork they may face similar demands from less democratic governments. Even in the U.S., Google has tussled with officials over user data. It dug in its heels when the Justice Dept. requested data on search requests, and challenged the government in court (see BusinessWeek.com, 4/24/06, "Ganging Up on Google").

The company has told Brazilian authorities that if they simply rewrite the summons to Google Inc. rather than Google Brazil they will take the appropriate action, just as they have done in at least 70 other cases elsewhere in the world. "It is and always has been our intention to be as cooperative in the investigation and prosecution of crimes as we possibly can, while being careful to balance the interests of our users and the request from the authorities," says Nicole Wong, Google Inc.'s associate general counsel. "We have and will continue to provide Brazilian authorities with information on users who abuse the Orkut service, if their requests are reasonable and follow an appropriate legal process."

DOUBLE STANDARD? The attitude angers human rights activists who say Google is allowing procedural bureaucracy to get in the way of tracking down pedophiles. They feel that Orkut could easily hand over the info, just as it did earlier this year to avoid paying damages to a São Paulo socialite who sued the company after someone created a false profile under her name. "That proves it can comply with judicial orders but won't do it here for some reason," says Tavares.

Google says it was forced to hand over information in that case because a court ordered it to. But it should be worried because there’s a lot at stake with Orkut. Although the site has not taken off in other countries, including the U.S., where similar sites like MySpace (NWS) and Facebook still hold sway, Orkut is a cultural phenomenon in Brazil, where an astonishing one-in-two of the country’s 32 million internautas have a profile on the site.

NOTHING TO LOSE. The craze has been debated on television programs, scrutinized in countless magazine articles, and even been the subject of books. Go to any cybercafé in Rio or São Paulo and wired youngsters will be leaving messages for friends, checking out potential dates, and surfing through Brazil's irreverent cyberspace. The model is so successful that major Brazilian portals like UOL have created their own versions.

However, Orkut does not make any money for Google. It has no ads, no subscriptions, and no other revenues—and if the current bad publicity is followed by huge fines, then officials could be tempted to cut their losses and shut it down.

Google denies that option is under discussion but the continuing judicial battles can only wear down the company's resolve. It has already tested the patience of police and human rights groups. After two years of frustrated attempts to get Google to comply, they are now going all out to make the company pay.

"Google's future in Brazil is under threat," says Tavares. "If they continue refusing to comply with Brazilian justice then they could be forced to leave the country. We don't want that to happen but we were given no choice. Instead of sitting down and trying to resolve the situation they opted for conflict. They need to start taking responsibility."


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