Google and Skybox: high-rez tech sparks concern over commodities trading

Google’s $500 million deal to buy the aerospace startup Skybox Imaging has prompted a few jokes about Google as “Big Brother,” watching from the sky. But the watchdog group Public Citizen has a more specific concern – commodities trading and market manipulation.

In a letter to federal regulators this week, the Washington-based group is warning that traders are already using Mountain View-based Skybox’s high-resolution technology and analytic software to monitor things like oil and gas pipelines, production facilities and storage tanks.

That can give unfair advantage to trading firms that can afford to pay a high price for market intelligence about supplies, shipments and other activities, warned Tyson Slocum of Public Citizen, which wants the deal reviewed by the Federal Energy Regulatory Commission, the Commodities Futures Trading Commission and the Federal Trade Commission.

“Rapid advances in technology, exemplified by firms like Skybox, are changing the fundamentals of commodity trading,” said Slocum, who added in the letter: “The problem is that the proprietary market data collected and sold by Skybox is not regulated or tracked by any federal agency.”

Google declined comment this week.  And Slocum said in an interview that he’s not accusing Google of planning to corner the market in oil futures.

But he said he’s worried about who might buy the data from Google.  And he scoffed at Google’s statement, in announcing the deal, that Skybox may help with its efforts to deliver Internet access in underserved parts of the world. (Google also said it plans to use the technology to improve the accuracy of its online mapping services.)

“There are humanitarian uses for this,” Slocum said, “but that’s not where the real paychecks come from.”

Skybox’s technology is both innovative and powerful. The company has boasted that its high-resolution video cameras can track the number of cars in Walmart parking lots, to predict shopping trends, and the movement of trucks outside Taiwanese assembly plants, to anticipate when the next iPhone is being released. The company’s website says it can help “monitor oil storage containers with sub-meter imagery … to inform commodity trading decisions.”

And as we reported earlier, Skybox has also developed an unusual archive of images and other satellite data, which it stores in a computer “cloud” that commercial clients can mine for useful information.

There’s no doubt that data will be valuable.

(File satellite image provided by Skybox Imaging shows smoke rising from anti-government protests in Kiev, Ukraine. AP Photo/Skybox Imaging)





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