NEW YORK Consumer watchdog Public Citizen has called on U.S. regulators to conduct a review of Google Inc's recent acquisition of aerospace startup Skybox Imaging, concerned that Skybox's satellite technology may aid manipulation of commodity markets.
In a letter to federal energy and trading regulators on Friday, Public Citizen said that access to Skybox's satellite images of oil, gas and power infrastructure is already helping deep-pocketed firms such as banks and hedge funds "gain a financial trading intelligence advantage" in commodities.
Commodity traders already subscribe to Skybox data which includes satellite imagery of oil shipments, pipeline activities and storage sites, Tyson Slocum, director of Public Citizen’s Energy Program, wrote in the letter addressed to the Federal Energy Regulatory Commission, the Commodities Futures Trading Commission and the Federal Trade Commission.
Other firms such as Genscape also provide proprietary data to traders looking to get what edge they can in a competitive marketplace.
But with access to Google's huge customer base, Skybox's technology could exacerbate the kind of unfair advantage that already exists for bigger players.
"Federal regulators and Congress must take swift action to keep consumers from further harm at the hand of market participants seeking to exploit non-public information to the disadvantage of other traders," Slocum said.
Google declined to comment. Skybox was not immediately available for comment.
Historically, trading firms have purchased physical assets such as cargoes of oil or gas as part of their trading activities, but the kind of high-resolution cameras and satellite images that can track the route of a single car or person means owning infrastructure may no longer be necessary to garner knowledge of commodity markets.
"A non-public contract with Google can now provide the same competitive trading advantage," Slocum said.
(Reporting by Edward McAllister; Editing by Lisa Shumaker)
Trending On Reuters
A Swiss man attempting to circumnavigate the globe with an aircraft powered only by the sun's energy has broken a world record for the longest non-stop solo flight, the project team said on Thursday. Full Article
India to spend $8 billion to boost irrigation, reduce dependence on monsoon Full Article
"Wow, pulled back wrong throttle" - captain of crashed TransAsia plane Full Article