Today, Explained - Apple vs. Facebook (feat. Privacy)

Episode Date: April 28, 2021

Apple updated its software and Facebook was very upset. Recode’s Sara Morrison and Peter Kafka explain. Roller derby is involved. Transcript at vox.com/todayexplained. Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Visit connectsontario.ca. Every so often, Apple drops a software update, then it asks you to download the update, then you ignore it, and then it's like, remember this update, and you're like, yes, I still don't care, and then it's like, you really should update. And then you accidentally hit yes one day and your phone restarts. And you're like, no, my phone, I need it. Or you have it set up to update automatically. Tip of the hat to the pragmatism. This week was one of those weeks where an update dropped. But this particular Apple software update was different because it upset one supremely powerful tech person. Can you guess which one?

Did I adequately answer your condescending question? Yeesh, Mark. Anyway, Sarah Morrison's here to explain. She's a reporter at Recode. So Apple just made a change to its software that could fundamentally change both your privacy and the mobile advertising business. iOS 14.5, that's, you know, an update to the operating system, came out on Monday, and it's been subject of a pretty big fight between Apple and a small tech company whose business depends on advertising. You might have heard of them. They're called Facebook. And these tech behemoths don't fight in public very often, so it feels worth talking about. What about this 14.5 software update upset Facebook? Well, to get into what is so particularly upsetting to Facebook, I kind of have to get into

like the mobile advertising business and like sort of the app economy and how it works. And I thought sort of the easiest way, most accessible way to do that would be to just give you a specific example. So before and hopefully after the pandemic, I played roller derby. Roller derby is like the sport. It is a sport, yes. Like the sport on roller skates that you see depicted in popular culture sometimes. Yeah. It's people on skates going in a circle hitting each other is probably what it's best known as. Roller derby?

This is tomorrow. I mean, there was a movie about 10 years ago called Whip It, you know, with like Drew Barrymore and Elliot Page and Eve. I just want to tell y'all that you're my heroes. You should come to tryouts on Tuesday. I don't think it's a very accurate depiction, but I do love the movie.

Wait, Eve is in that movie? Hell yeah. Well, now I kind of want to see it more than I did before. Yeah, it's fun. And also Jimmy Fallon. Men, hold on your cookies. It's the Herald Scouts! Oh, now I don't want to see it again. That's your opinion. It's your opinion. It's up to you. Anyway, I do the PR for my league, which means I'm in charge of advertising our bouts.

And, you know, we want to sell tickets. And I want people to come and cheer for me because I do cool stuff. And we have a limited budget. And there's kind of a limited probably type of person who wants to see a roller derby bout in Yonkers. So I have to sort of advertise a certain categories of people, you know, people in greater New York City whose interests include roller skating, sports, women's sports, extreme sports, fitness, family friendly events. You can bring the whole family to this event and it's a lot of fun and that kind of thing. And that means that, you know, some company needs to know who fits into those categories to target them for those ads. The company being like Facebook in this case? It could be Facebook, whatever company I choose to do the advertising through. Yeah. So how do they know who is interested in roller skating and yonkers?

How do they know? They collect data on them, don't they? Exactly. You know, mobile apps, companies will put trackers like in the app code and they'll put their trackers in like a bunch of them. So Facebook and Google are two of the biggest ones. They put their trackers in like thousands of apps. And there's other companies that do this too. Probably never heard of most of them. And they'll just take all the information your device supplies through all of the apps that you have. And they combine that together to get a profile of you.

So if you just think of like all the apps on your phone right now and how, when, where you use them, you know, one company that had trackers and all of them could sort of infer your age, your race, gender, where you live, where you work, what your job is, your income, marital status. Do you have kids? Do you want kids? Are you trying to have kids? Hobbies, interests, all that kind of stuff. And then they'll target ads to you. And that's just that's a multibillion dollar business that powers really most of the app economy now. This is like if I'm talking to my colleague Sarah about roller derby, all of a sudden, like the next day, maybe I see some ads for like roller skates when I'm Googling

stuff. So I get that question a lot. Like people are always certain that their phone is listening to them. I'll never say never, but it's probably not actually listening to you. But yeah, there's a bunch of things, not just apps that you might do on your phone with your computer that, yeah, they're so good at tracking basically through all these different methods

that it seems like they must be listening to your conversations. They're that good at it. Okay, so it's definitely like if I Google roller derby and the next day I see like ads for roller skates while checking my email. I don't know about checking your email, but like, yeah, I mean, you'll see them on websites. I tried to buy a nightstand once

and I've been haunted by ads for nightstands ever since. This is going to be a detour, but I'm just going to ask this question for the many, many people out there who have it. Yeah. Why isn't this technology smart enough to know once you've purchased the nightstand? So it can leave you alone

because nobody wants to buy more nightstands after they buy some nightstands. You know, that's crazy. Yeah, I've never figured out how they're smart enough to know what you buy and then not smart enough to know that you don't need like two kitchen sinks. I don't know. Nobody knows. That is the eternal mystery. All right. Thank you for indulging my detour. But the point is, there is all sorts of code in our technology built and put there just to track what we might want to buy.

Yeah, exactly. By inferring what your interests are and who you are. Is this the thing that Apple's changing right now? And is this why Facebook's mad at Apple? Yeah, pretty much. So like I said, Facebook is one company that has a bunch of trackers and apps. And how they can identify your specific device across all those apps is that iPhones send out an identifier. And iPhones is called an identifier for advertising. And now you can have the choice of if you want to allow apps to track you or not. When you open an app the first time, it'll say ask apps not to track you or allow tracking.

And if you say, you know, ask app not to track you or allow tracking. And if you say, you know, ask app not to track, then it won't send out that identifier. So what you do in one app stays in that app. It doesn't get combined with what you might've done in other apps that a company like Facebook has their trackers in, which then, you know, like cuts those companies off from like this combined pool of data that is the source of a lot of this targeted advertising. So if you're a company who relies a lot on that data and targeted advertising and you've been cut off from that, then, you know, you're going to have to figure out a different way to make your advertising work. And if Facebook can't figure out a different way, what does it

mean for them? How big a deal is this to their business? I mean, for Facebook itself, they obviously have a lot of other ways other than mobile apps to get data. Like they have the data that you give them willingly when you use facebook.com, right? So they have a lot of sources of data also. This is something that cuts them off from some data, but not all. But there are other companies that rely a whole lot more on that app data, and they're the ones that are probably more upset about it. They just haven't—Facebook has just been the noisiest, and they're also huge. So they're the ones getting the most attention for complaining. Is this a game-changer for privacy, that Apple's finally getting on board? I mean, Apple's been for years positioning itself as the privacy-first company because, you know, unlike its Google or Facebook, it doesn't really have an advertising

business, so it can do that. So it's, you know, part of the premium you pay for with an Apple device, you know, is privacy. This is them, you know, even further positioning themselves this way, taking that stand in a way that I don't think harms them as fundamentally as it would if a different company took that stand. And I think it's also where things are going just with the law. States are enacting privacy laws. Other countries are enacting privacy laws. People are more aware of their privacy.

So Apple's saying, yes, we also, you know, like we're the company that cares, you know, makes them look that much better. Sarah Morrison is what they call her at Recode, but her roller derby name is actually Queen Eliza Death II. She plays on Suburban Brawl. You can catch her and her team

at Suburbia Roller Derby up in Yonkers if and when we get back to normal. Less roller derby, more big tech in a minute on Today Explained comes from Aura. Aura believes that sharing pictures is a great way to keep up with family, and Aura says it's never been easier thanks to their digital picture frames. They were named the number one digital photo frame by Wirecutter. Aura frames make it easy to share unlimited photos and videos directly from your phone to the frame. When you give an Aura frame as a gift,

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or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge betmgm operates pursuant to an operating agreement with iGaming Ontario Peter Kafka you're a senior correspondent at Recode. Apple made this big change in the name of our privacy. But the question I have is like, why were they letting these companies track us this way to begin with? That's a pretty good question. I think Apple has been probably asking itself that for a while. They've been complaining about this kind of tracking for years, years and years and years, more than a decade.

And their complaints have gotten louder over the last few years. We've seen regulation that's supposed to sort of cut down or at least get some of this tracking sort of under control. If you've been to a website in the last couple of years, you probably had to click a button saying, I accept this. It's basically giving the website permission to track you. And of course, you have no idea what you're actually signing in on. And what Apple's basically doing now is saying, all right, we're going to do this ourselves. We're going to put a stop to it. We've been asking Apple people to do it. We're going to do it.

And Facebook is upset about this, as we established in the first half of the show. What kind of relationship have these two behemoths had for the past decade or so? They're frenemies. This is a classic Silicon Valley frenemy relationship. They both need each other. Facebook needs Apple's iPhones to distribute its software. And Apple needs to have Facebook on its iPhones. If you bought a $1,000 iPhone and you couldn't get Facebook or WhatsApp or Instagram,

you would call that a defective iPhone. So they need each other to coexist, but they often fight and squabble. Do we think that Apple consulted Facebook in this big decision it made and executed this week? I'm pretty sure Apple did not go to Facebook and say, hey, here's a heads up. We're going to do this. What do you think about that? I think they've been fighting over it for years. Facebook certainly knew what was happening.

They were telling their investors right away this could be a problem for us. So it's been on their radar for close to a year. So obviously, the big question for Facebook right now is its bottom line. But it does seem like part of the conflict here is ideological. Facebook is free, but takes your data. And Apple is really expensive, but is trying to do a really good job on privacy. I've seen so many privacy commercials. It seems like it's basically their tagline right now. Is that right? Right now, there is more private information on your phone than in your home. Think about that.

So many details about your life right in your pocket. This makes privacy more important now than ever. It didn't used to be their tagline, buy an iPhone because it's private. Yeah. But it certainly has become one now. I can't imagine, honestly, that there's a single iPhone buyer out there who's buying an iPhone because they think Apple protects their privacy. Yeah. But Apple has been making this distinction between itself and the ad tech business for a long time.

It goes back to the Steve Jobs times. Privacy means people know what they're signing up for in plain English. And some people want to share more data than other people do. Ask them. The time he was calling out Google, then they sort of trained their sites on Facebook. Tim Cook gave a speech on something called Data Privacy Day, which I bet you didn't know existed, in January, where he didn't say the word Facebook, but he certainly directed a lot of barbed language toward Facebook. What are the consequences of prioritizing conspiracy theories and violent incitement

simply because of the high rates of engagement? What are the consequences of not just tolerating but rewarding content that undermines public trust in life-saving vaccinations? It is long past time to stop pretending that this approach doesn't come with a cost. Which is pretty extraordinary to hear from anyone, let alone the CEO of Apple. Has like Mark chipped back at Tim or anyone else? Yeah, but it's more muted. Facebook's response is, hey, Apple is actually going after small business.

We're standing up for small business because our clients are small businesses and they need this data that we're harvesting to sell ads. We're all frustrated. We're all dealing with COVID. Unfortunately, there's this other thing that's coming up, which is an update to Apple's iOS. Apple iOS update has the potential of bringing a big portion of my business to a screeching halt. So Tim Cook is standing up for privacy. Mark Zuckerberg, one of the richest men in the world, says he's standing up for mom-pa businesses.

Wow. Do we have any idea who's making the more compelling argument to people? Like how people receive these, you know, feuding arguments? That'd be a good survey. My sense is no one is paying attention to any of this. Now they will after our fine podcast. This is going to be the good survey. My sense is no one is paying attention to any of this, but now they will after our fine podcast. This is going to be the game changer. Yeah. When that button, have you seen that button pop up on your screen?

I don't think I've updated yet. and I got one of those screens and it says, allow ESPN to track your activity across other companies, apps, and websites. Who's going to say yes, allow ESPN to track me when I'm not on ESPN. If you think about it for any second, the buttons that you and I have seen for the last couple of years, it's not clear at all what they're asking us to do.

And Apple's being super clear. Do you want ESPN to track your activity across other companies, apps and websites? Is this ultimately just marketing? Is this just Apple trying to distinguish itself from everyone else? I think two things can be true at the same time, right? It can be a marketing edge for Apple. We can even make it multiple things. It can be a marketing edge for Apple. It can be a way for Apple to distinguish itself from Facebook and Google when it comes to regulation, which is increasingly a big deal for all the tech companies. And I think it's probably something that Tim Cook and other Apple employees believe sincerely is a problem. And you mentioned Google and how Apple had early on trained its sites on Google. Is Google updating its software so that Facebook and Co. can't track

us? Any Google app you use on your iPhone is going to be treated the same as a Facebook app or anything else. And in theory, some of this stuff should affect Google as well in terms of its ad business, but they don't seem concerned about it at all. You know, you tell Google what you want, you're searching for it. So they've got a very good sense of how to serve you an ad. They also do this ad tracking stuff, but it's less important to them than it is for Facebook. But we should also acknowledge the fact that Google makes a ton of phones themselves and are not changing their software, at least at present. Yeah, the phone world is divided between Apple and Google. I think Google has the

predominant worldwide share of phones through their Android software. They're not making any Apple-like changes. And by the way, they pay Apple billions of dollars a year to get their search engine on your iPhone. So it's not like Apple is completely free of ad tech and ad tech money. They're taking billions of dollars of it from Google. So ultimately, most of the phones out in the world, which are Google phones, aren't changing. But a ton of phones out in the world that are Apple phones are. Both of these companies and Facebook are facing a raft of antitrust regulations, some lawsuits over the way they run their business. Does this help Apple on that front? I know that Apple thinks that it should be treated differently than the Googles and the Facebooks of the world. And they've been quite clear about that privately and publicly for years. As we've seen this new interest in sort of reigning in big tech, Apple said, hey, hey, just to be clear, we're not like the other guys. We're just making these phones, these super expensive phones. We're not raiding anyone's privacy. We're not toppling democracy. We're not causing genocide in Myanmar.

We're cool. I think this probably helps them in that regard. And ultimately, is it a good thing that these companies are kind of feuding in this way? Does it end up helping us, the users? The fact that you and I are talking on a podcast about a change in ad tech privacy policy on iPhones, which is pretty gnarly, sort of arcane stuff for most people. It's a little niche. I think it's good. I think it's good that Apple is going to basically compel everyone who uses its phones to at least think for a second about what they're doing with their phone. By the same token, I think it'd be good for people who buy $1,000 iPhones to know how and where those things are made. They're made by people

who are not getting paid a lot of money in China under pretty tough conditions. You should understand what your role in the world is, I think, in general. And I think when it comes to technology, you should understand your role in that. Thank you for helping us understand, Peter. I do what I can. Recode's Peter Kafka. Check out his podcast, Recode Media. I'm Sean Ramos for him. It's Today Explained. Thank you.