Facebook grew to be one of the world’s largest companies by gathering up large quantities of personal data and auctioning them off to advertisers. Now that Apple is posing a threat to that business, Facebook has embarked on a quixotic marketing campaign against its rival that it says is really about saving small businesses.
It’s more like Goliath versus Goliath.
Apple, maker of the iPhone, has drawn Facebook’s ire over a plan to require app users to choose to opt in to the kind of data collection and tracking that can produce creepily specific ads, known as targeted advertising. Apple plans to apply the change early next year, which is likely to result in fewer dollars flowing to companies like Facebook. That’s because targeted ads are sold at a premium over general-interest ones, like for Coca-Cola.
Without any meaningful federal privacy laws, it has been left to the companies themselves to determine how customers’ data should be handled, which has led to today’s enormous — and self-serving — personal-data collection regimes. There are virtually no limitations on how companies may track Americans’ online behavior and gather information about them. The companies do this so that advertisers can sell people everything from insurance plans to basketball shoes — typically without people’s knowledge of the sophisticated manipulation taking place behind the curtain.
Federal lawmakers in the past couple of years have proposed a variety of data privacy bills, none of which has yet advanced. California has the most expansive laws, granting consumers the right to know whether their data is being sold or provided to other companies, but also the right to block companies from selling it.
Displeased with Apple’s planned changes, on two days this week Facebook took out full-page ads in newspapers (including The New York Times) and rolled out a website with testimonials from small-business owners about how Apple could hurt its ability to reach specific customers.
The dispute centers on a new prompt on Apple devices that will ask users whether they want to allow companies to track them across multiple apps. You’ve probably seen similar pop-ups for location data collection — though Apple soon will give users the option to provide their approximate location, rather than a precise one. Also, app makers would be required to provide easier-to-understand descriptions in Apple’s App Store about what data is collected and how it is used. There would, however, be no new limitation on Facebook or others to serve up targeted advertising based on demographic and other data they collect inside their own apps.
Facebook’s argument is, in essence, that a company simply cannot successfully hawk its wares without knowing which potential customers spend four hours each day on cooking apps, have extended family in South Texas, visit bungee jumping sites or recently bought a computer mouse.
Richer data on consumer spending and behavior has, of course, always been desirable. Imagine the allure of a marketing campaign that puts ads for Homer Simpson sleeping bags only in front of fans of “The Simpsons” during camping season. But such data collection really isn’t consumer-friendly, and it’s unnecessary for corporate growth — many companies in the pre-internet era somehow managed to rise from start-up to major corporation. Furthermore, it is not the consumers’ job to ensure that companies have effective marketing.
“What this fight shows is the tremendous value your data has if two multinational corporations are willing to fight over it,” said Jordan Fischer, a Drexel University assistant law professor who follows privacy issues. “The question is: Do consumers have the right to own that data, or do Facebook and Google?”
Without comprehensive federal privacy laws, such as Europe’s General Data Protection Regulation, consumers will have to hope that tech companies can responsibly lead the way. That may seem unreasonable, considering that data-led advertising helps underwrite many of the free services consumers enjoy today, like email and web surfing, but Facebook and Google are also enormously profitable and can afford a modest impact to advertising sales.
“Consumer choice is what we’re for, which is why we built prominent in-app controls,” a Facebook spokeswoman said. But that argument doesn’t quite pass the smell test. Most consumers don’t take the effort to switch off data collection controls in their apps, meaning many are defaulted into it.
While Apple’s proposed fix is not a panacea, it would be a step in the right direction. If users want to provide more of their data to app makers, they can make that choice. It seems that most Americans would prefer to keep their every click to themselves: An August survey by TapResearch showed that fewer than one in four respondents were likely to allow apps to track them if given the choice.
It’s also possible, if not likely, that Apple has ulterior motives for the change. By making tracking more difficult, it could be pushing free apps toward paid services to make up for revenue lost from targeted advertising. (Apple takes as much as a 30 percent cut of in-app sales.) Or it could be working to preference its own tracking technologies that allow it to make digital dossiers based on consumers’ behavior within Apple apps and services. Apple denies it has anything but consumer privacy in mind, and it has said it doesn’t share that data with others.
Until the federal government more seriously takes up data privacy, consumers will be vulnerable to corporations that are motivated by profits to find new and creative ways to harvest personal information. Apple may have a hidden agenda behind its privacy measures, but if a result is Americans’ having more control over how and where their sensitive information is used, it’s a risk we should be willing to take.