ColdFusion - Apple vs Facebook - The Great Privacy Fight

Starting point is 00:00:00 This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify.

Starting point is 00:00:28 Ready to take your investing knowledge to pro-level, this is Fidelity Connects, your daily edge in the markets. Get deep insights on real-time market topics that may impact your investment portfolio. Listen to Fidelity Connects on Spotify today and power your next move tomorrow. Hi, welcome to another episode of Cold Fusion. During the infancy of the internet, possibilities felt endless and inspired. Some ideas have been realized, while others have faded into insignificance. The internet has completely changed the human race, but with all of the good comes some of the bad. It's pretty well known now that corporate monopolies are taking advantage of us.

Starting point is 00:01:10 Over the past two decades, our web browsing habits have turned into a hunting ground for targeted advertising, data harvesting, and the exploitation of users by predatory free-to-use platforms. But what if there was a way to stop it? One of the most unlikely companies appears to be doing just that. Apple. In their latest software update, Apple gave the iPhone the ability to block companies from buying and selling user data. This update from Apple strikes right at the heart of Facebook's business model. Zuckerberg isn't happy about this, and a battle between the two tech giants may have just begun. Let's take a look.

Starting point is 00:01:48 This intensifying battle between the tech giants comes as both companies are under the regulatory microscope. Guys? You are watching Tall Fusion TV. Even though Apple has started to pivot towards software and services, Apple is primarily a hardware manufacturer. Thanks to this, they've managed to avoid the allure of a data harvesting business model. And that's not to say that they haven't overstepped. They've got a long history of exploiting their customers in other ways. Right to repair comes to mind, and also slowing down old iPhones.

Starting point is 00:02:24 Though with all of that being said, it's clear that user privacy has always been a priority for Apple. At a 2010 conference, Steve Jobs made his opinions about privacy clear. To ensure that people understand what these apps are doing, a lot of people in the Valley think we're really old-fashioned about this. Privacy means people know what they're signing up for, in plain English and repeatedly. That's what it means. I'm an optimist.

Starting point is 00:02:55 I believe people are smart, and some people want to share more data than other people do. Ask them. Ask them every time. Make them tell you to stop asking them if they get tired of you're asking them. Let them know precisely what you're going to do with their data. That's what we think. He imagined a world of open and honest interactions between user platforms where there was always a choice for the consumer.

Starting point is 00:03:25 It's clear that Steve Jobs saw where the data harvesting model was heading and Tim Cook plans to do something about it. I spoke in Brussels about the emergence of a data industrial complex. As I've said before, if we accept as normal and unavoidable that everything in our lives can be aggregated and sold. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign deletions.

Starting point is 00:04:01 and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. Then we lose so much more than data. We lose the freedom to be human. Right now, users may not know whether the apps they use to pass the time,

Starting point is 00:04:27 to check in with their friends, may in fact be passing on information about the photos they've taken, the people in their contact list, or location data that reflects where they eat, sleep, or prey. The end result of all of this is that you are no longer the customer. You are the product. In iOS 14, Apple introduced the app privacy function. It allowed users to see exactly what data was being extracted from them.

Starting point is 00:05:00 This put into perspective just how much information their favourite apps were given access to. Now with this information, users could make an informed decision. For example, if a user was looking to download a new messaging platform, they could now see a clear list of data each app would take from them in exchange for their services. For users of the open source messaging app signal, the only thing the app would take would be their phone number, and that's expected. For Facebook Messenger users on the other hand, It would come as quite a shock to find out that as they were happily sending messages to their friends and family over the years,

Starting point is 00:05:35 Facebook was extracting their physical address, email address, name, phone number, user ID, device ID, purchase history, financial information, precise location, course location, contacts, photos or videos, gameplay content, search history, browsing data, product interaction, advertising data, crash data, crash data, and performance data. The contrast is stark, and without iOS 14, users would have no idea. When Steve Jobs emphasized the importance of choice, this is what he was talking about. Although consumers have always had the opportunity to choose which apps they use, now they could make a complete informed decision. In iOS 14.5, Apple went a step further. The company introduced a feature, app tracking transparency, and Tim Cook has ambitious host.

Starting point is 00:06:28 that it would impact both the tech and advertising industries. App tracking transparency, or ATP, enables users to choose whether or not they want a specific app to access, track, and share the data that is valuable to advertisers. Each time you open up an app for the first time, a pop-up message will appear that reads, allow this app to track your activity across other companies' apps and websites? Then it's followed by an appeal from the company themselves, informing the user why tracking is important to the functionality of the app. If you're a user that enjoys ads specifically targeted towards you, you can allow that. But if you prefer to keep your information private, you now have

Starting point is 00:07:11 the option to opt out of advertiser tracking entirely. Apple's Senior... This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations,

Starting point is 00:07:37 more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. Insurance operations today are fragmented and policyholders expect more. That's why leading insurers run on Adion. From premium collection to claims payout, Adion supports the entire insurance

Starting point is 00:07:58 insurance value chain, giving insurers full control over how money moves, a single platform to reduce fragmentation, complexity, and risk. Drive revenue, control claims cost, and power your next move with Adion. Learn more at adion.com. Vice president of software engineering, Craig Federigi explains this further to the Wall Street Journal. Usually telling you that they're going to track you with a big blue accept button and no real choice at all. We had to make it a meaningful choice. And we had to make it a meaningful choice. And we had to make it a clear choice and one that had effect, and that I think is in deep contrast to most of what you see on the internet. Every iPhone comes with a unique string of numbers known as your

Starting point is 00:08:42 identifier for advertisers, or IDFA. This number is, as you may have guessed by the name, used for tracking your actions and movements within an app. Android has a similar technique, but we're focusing on iOS today. If you've ever wondered how advertisements are so specifically targeted towards your interests, recent web searches or downloads, your IDFA is responsible. Here's how it works. Say you've decided to take up rock climbing as a hobby, so you download a free app that shows you climbing gyms in your area and tracks your progress. From the moment you open that app, it will begin harvesting your data, like location

Starting point is 00:09:20 and health information. But now you need some gear. So you head to your favorite shopping app to purchase some shoes, a harness and a chalk bag. You might have even searched for entry-level products specifically, seeing as you're just a beginner. Both the shopping and rock climbing apps will then send all the information it has gathered to a data breaker, and the data broker will then sell this data to your social media app of choice. Between the rock climbing app, the shopping app, and the information that your social media app already knows about you, there's a fairly specific picture being painted about the owner of this particular IDFA number.

Starting point is 00:09:54 You. Suddenly, your social media feed is showing. advertisements for beginner rock climbing classes and sales on entry-level climbing products. And then, special offers from gyms in your area begin to show up. The results of data harvesting and sale can vary, but it's important to note that this transaction is not happening in a strictly linear way. Each of the three apps are attempting to make money of the data that they've just been given or bought from the data broker.

Starting point is 00:10:21 In fact, almost every one of the apps on your phone is. IDFA numbers allow for an intricate interconnected system purpose built for data extraction and monetization. Apple's app tracking transparency stops this right at the beginning of the process. It does this by simply blocking an app's access to your IDFA number. This means that an app can extract all the data at once, but without a number to assign that information to, it's almost worthless. This last fact is devastating for Facebook. Mark Zuckerberg is upset about this, and understandably so. Facebook's entire business model is centered around targeting advertising and sales,

Starting point is 00:11:05 which are powered by the data that app tracking transparency is about to cut off. Zuckerberg quickly realized that the profitability of his platform was endangued. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales. Using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most.

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Starting point is 00:12:08 Free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. In December of 2020, Facebook took a full-page ad in the Wall Street Journal with a headline reading, quote, We're standing up to Apple for small businesses everywhere, end quote. The ad went on to explain that while limiting personalized advertising would hurt big corporations, it's the small businesses that would suffer the most. A Facebook representative also claimed that these types of restrictions would force app developers

Starting point is 00:12:41 to start charging for their products instead of offering them for free. Apple has hit back on Facebook's claims, reminding everyone that the app tracking transparency feature does not take away an app's ability to track its users. It simply gives them a choice in the matter. There is no doubt that iOS 14.5 would deal a lot of damage to platforms like Facebook, and this was confirmed in January of 2021, when Facebook's CFO, Dave Weiner, said that the company is expecting to see high opt-out rates. And in March, he confirmed that Facebook's profitability is in jeopardy, stating,

Starting point is 00:13:18 quote, we do expect this to be an impact to the business and impact our growth rates. In fighting against the app tracking transparency feature, companies like Facebook, Facebook have exposed their flaws better than any critic ever could. With every statement criticizing Apple for their move, comes as an admission of guilt. An admission that the free-to-use targeted advertising model can only succeed if users are denied the right to choose. We increasingly see Apple as one of our biggest competitors. I think this is becoming more of just, more than just a tech bro rivalry. And he's really showing his hand and maybe singling to investors that this is going to be a great

Starting point is 00:13:59 problem for profitability and top-line sales growth of one of his biggest businesses, which is advertising in the quarters ahead. So to me he seems to be sweating this out a little bit, and if you're an investor in Facebook, it's something that I would probably take into consideration. I have no doubt that Facebook, who was negatively impacted by this update, will invent new ways to get around this and to ensure growth. But Apple does have a history of setting trends. If app tracking transparency is received well by the public,

Starting point is 00:14:29 it could just be a matter of time before other companies create their own version. Could Apple be doing all of this just to appear better in light of legal antitrust cases? Yes, that's possible. But whatever their true motive is, I think Apple has ultimately done a good thing here. And at the very least, it'll be good for their brand image. But whether this will change the course of the internet is yet to be seen. But if 2020 has taught us anything, it's to expect the unexpected. Facebook isn't going down without a fight.

Starting point is 00:15:00 Zuckerberg has outlined plans to facilitate sales directly through its own apps. Facebook shops and Instagram shops both launched last year and will allow brands to sell directly on Facebook-owned social media networks. Facebook also just recorded record revenues at $26.17 billion. And they have almost 3.5 billion monthly users across their family of apps, so it's going to be interesting to see how Apple affects them in the future. So what do you guys think? Let me know in the comment section below or head over to the Discord to chat. I'll be hanging around in there

Starting point is 00:15:34 for a couple of hours after this video drops. Oh and also I just started another YouTube channel. It's for the music that I produce so my more creative side. If you're interested in that kind of stuff go check it out. And with that we've reached the end of the episode. So thanks for watching if you've just stumbled across this channel, feel free to subscribe. Otherwise you can follow me on my other social media in the links below. My name is DeGogo and you've been watching Cold Fusion and I'll catch you again soon for the next one. Cheers guys. Have a good one.

ColdFusion - Apple vs Facebook - The Great Privacy Fight

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