Tuesday, November 30News That Matters

Shoshana Zuboff Explains Why You Should Care About Privacy

michael barbaro

From The New York Times, I’m Michael Barbaro. This is The Daily.

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Today, the story of how a seemingly routine software update became a major battle in the long-running war between Apple and Facebook. Astead Herndon spoke with our colleague, Mike Isaac, about what’s at the heart of the conflict and why the stakes have become so high for both companies.

It’s Tuesday, May 11.

astead herndon

So Mike, can you tell me about this thing that Apple premiered the other day? It seemed pretty small, but from what I’m gathering, it’s not that small.

mike isaac

Yeah. So the other day, Apple rolls out this ad that seems pretty innocuous, I guess, at first glance.

archived recording (woman)

When you’re using apps on your iPhone, you may start to see this. It’s the new App Tracking Transparency prompt.

mike isaac

There’s this nice-sounding woman’s voice telling folks, hey, we’re going to introduce this new software. And you might start noticing this prompt on the iPhone when you open certain apps.

archived recording (woman)

—a choice on how apps use and share your data.

mike isaac

It’ll say you can allow apps to track you, or you can ask them not to track you.

archived recording (woman)

—data like your age, location, health information, spending habits, and your browsing history, to name a few.

mike isaac

They basically walk folks through this idea that—

archived recording (woman)

—they collect thousands of pieces of information about you to create a digital profile that they sell to others.

mike isaac

Some apps on the iPhone are building entire profiles of information on you and tracking your behavior across different apps rather than when you’re using the apps themselves.

archived recording (woman)

This has been happening without your knowledge or permission. Your information is for sale. You have become the product.

mike isaac

And what Apple is doing is essentially very kindly pointing out—

– ^archived recording (woman)^

That’s why iPhone users will now be asked a single, simple question— allow apps to track you or not?

mike isaac

Here’s a button that you can use that will put right in front of you when you open the app to turn all that off. And for the first time, you can find it without having to dig into your settings. And look how great it is that we’re putting this in front of you.

archived recording (woman)

We believe that you should have a choice. App Tracking Transparency— a simple new feature that puts your data back in your control.

mike isaac

And seems fine, whatever. OK. But over at Facebook, they start freaking out and losing their minds over this.

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astead herndon

So why is Facebook freaking out?

mike isaac

I mean, because Apple is basically, for the first time, giving the millions of people that use iPhones a really easy choice to opt out of advertisers using their data to track them across the internet. And for Facebook, that’s basically the entire business model of how Facebook operates. Facebook’s whole business is tracking you across the internet to make the ads that are served to you the most accurate as possible. You can think of Facebook’s actual customers as ad companies and advertisers who pay to place ads in your feed and my feed when we use the app.

astead herndon

Targeted ads have become a part of our lives. I think about how Instagram feeds me advertisements for sneakers and plants and matching jumpsuits because they’ve been tracking me across those other apps. So you’re saying if I click this button, would that be saying that I no longer wanted that?

mike isaac

I didn’t know you were a jumpsuit guy. But no, I think companies like Facebook, which owns Instagram, they say they track you in order to make your personalized advertising experience even better. And so you see the ads you want to see in your feed. What I think Apple is getting at here is essentially making that exchange more in your face, basically, saying, look, this is something that has been going on. If you want to opt out of it, that’s fine, but you should at least have the choice to do so. So this fundamental thing can now go away with this software update and with the click of a button that people push when they open up the app. And that’s existential. That’s the whole ballgame for Facebook’s business.

astead herndon

So that’s how Facebook sees this move by Apple, but are they right? Should we think of this as Apple directly targeting Facebook?

mike isaac

I mean, I think so. Basically, this is the biggest in a long line of long-simmering back-and-forths between the company as they’ve been in a cold war for the past 10 years.

astead herndon

A cold war? I didn’t know that. What do you mean?

mike isaac

So rewind back to 2010, 2011 era of Facebook and Apple coexisting with one another. At this point, they’re far from enemies. They’re actually pretty friendly. Steve Jobs and Mark Zuckerberg would go on these long walks in the apricot groves in Silicon Valley, and it was very— mentor-mentee sort of thing. I think Jobs was seen as an elder statesman at the time to young founders, especially like Mark.

Facebook is this up-and-coming company used by hundreds of millions of people. Apple has created the most popular consumer device used by millions of people. And they essentially have a kind of complementary relationship, really a symbiotic relationship. You can’t use the iPhone without apps like Facebook, and you can’t access apps like Facebook without a great smartphone to do it. And Apple was the one to provide it. And really, at this point, they seemed far from any sort of antagonism towards one another. But over time, they started kind of playing in each other’s spaces.

If you remember 2010, 2011— this was the time that I moved from my Blackberry to getting an actual smartphone then. I remember I bought an iPhone specifically to start using Instagram, which is kind of embarrassing. But this was when everyone was making that switch. And Mark Zuckerberg, he realized, I don’t own the operating system. We will always be subservient to Apple’s rules or to Google’s rules, and we need to change that. So he ends up developing their own smartphone, which Apple sort of is like, oh, OK, now you’re in our business now. Or another instance was basically messaging. Apple’s iMessage was used by hundreds of millions of people, and Facebook wants to be an owner of messaging services too. And so they start competing in little areas that didn’t seem as obvious before.

astead herndon

So originally, these are two companies and two C.E.O.s that think of themselves as very distinct, have a good relationship. But you’re saying there’s a change in the industry that pushed them closer and closer to one another where they’re now making services that they see as directly competitive to one another.

mike isaac

Yeah, 100 percent. Another thing that happens around this time is that Steve Jobs, the founder of Apple, passes away. He dies of pancreatic cancer. And his successor, Tim Cook, his number two, comes in and takes over the business. And Tim Cook is a very different C.E.O. He doesn’t feel that people’s data and information should be combed through by advertising companies and data brokers who want to use that you serve you ads. And I think that these two companies that might have had a friendly relationship, that becomes a little bit icier, I would say. But I really think the crux of the turning point for these two companies came in 2016, 2017.

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archived recording (reporter)

For months, Facebook has been under mounting pressure to be more transparent after revelations Russia used its platform to try to meddle in the 2016 election.

mike isaac

So Donald Trump was elected president at the end of 2016, and then slowly, information starts coming out about what role Facebook played in that election.

archived recording (mark zuckerberg)

One of my greatest regrets in running the company is that we were slow in identifying the Russian information operations in 2016.

mike isaac

People start discovering, oh, Facebook was used as a conduit for misinformation around how Americans think about each other.

archived recording (reporter)

They say a Russian group posted more than 80,000 times during and after the election campaign.

archived recording (man)

A group that claimed to be part of Texas but was, in fact, paid for by Russians in rubles.

archived recording (reporter)

Those ads, with a price tag of $100,000, pushed divisive social issues from immigration to race and gay rights.

mike isaac

And then there’s the Cambridge Analytica situation.

archived recording (reporter)

Cambridge Analytica drilled deep, looking for a trove of social media data on Americans to help Republican presidential campaigns fine-tune their messages and win votes.

mike isaac

So back in 2018, The Times unearths what is essentially a data leak in Facebook’s business.

archived recording (reporter)

Starting in 2014, Cambridge Analytica funded a personality test on Facebook and paid people to take it. Once a user answered questions, the app captured their friend’s information too. The New York Times has viewed a portion of the raw data involved in this breach, so we know it exists. And we have every reason to believe it is still in the hands of Cambridge Analytica despite their denials.

mike isaac

Cambridge Analytica was this crucial moment where Facebook was essentially pilloried by the entire world for being just totally reckless with user data. And I think that really had an effect on Cook and on folks at Apple. I think that really poisoned their idea of what Facebook was. It’s not this idyllic little company where they’re just trying to connect the world and make everything pollyannish. I think it became a darker thing. And at that point, Apple decided not only is privacy important to us, we’re going to make that a cornerstone of how we market ourselves compared to other companies like Facebook.

astead herndon

Can you explain why specifically Apple would care that Facebook was in this contentious moment?

mike isaac

I think there’s the personal and then the professional. One, I think Tim Cook actually does have a distaste for Facebook’s business model at its core. But I also think there’s really a professional business reason for doing this. And I was talking to a Silicon Valley exec a few months ago, and basically, they told me, look, if your competitor is on the ropes like Facebook is, you take a punch at them. You take a shot at them. And essentially, you hit them while they’re down because you can make your company look better at the same time. And I think there was part of Apple that recognized we have an opportunity here. And if we can use ourselves as a foil against, quote unquote, the invasive, data-hungry company that is Facebook, we can end up looking much better here. And that’s exactly what they did.

astead herndon

So what does Apple actually do, then, to capitalize on Facebook’s moment of weakness at this time?

mike isaac

So basically, Apple has these events every year where they preview their software. And one year, they trot out these new features. One of them is for Safari, their web browser. It basically says, we’re going to kill off tracking cookies in Safari. What that means is essentially, if you use the mobile web browsers on Apple’s phones, we’re not going to let companies like Facebook or Google track you around the internet using those web browsers.

astead herndon

Thank you for explaining cookies. I’ve never understood that my whole life.

mike isaac

I did my job for one. Yeah. And that was definitely a big move. That was Apple saying, look, we’re cracking down on tracking in our web browsers. Safari is used by millions, if not billions, of people who have iPhones around the world. The other thing that they do is— I don’t know if you remember when Screen Time came out, basically the thing that tells us how terrible we are for being on our phone all week. They specifically introduced this product saying, we have a way to keep you on your phone less. And in the demo, I believe they used Instagram as the example app saying, essentially, you spent way too much time on Instagram this week. Maybe you need to chill out a little bit. And inside Facebook, people are like, what? What are you doing? Why are you targeting us? Where is this coming from? So they have these Easter eggs in their presentations and stuff and a side-eyed version of a tech fight for a little while, but then I think it gets more overt.

archived recording (man)

From Chicago, this is Revolution, Apple changing the world.

mike isaac

Tim Cook goes on MSNBC.

archived recording (kara swisher)

Tim, thank you for coming. I think they’re all excited to get new iPhones from you.

mike isaac

One of our colleagues, Kara Swisher, actually is interviewing him at this point and says, Zuckerberg is getting hauled into Congress, and they’re getting essentially questioned for their role in the 2016 election and how they use data. And the host asks—

archived recording (kara swisher)

If you were Mark Zuckerberg, what would you do?

archived recording (tim cook)

What would I do?

mike isaac

And Cook, without missing a beat, says—

archived recording (tim cook)

I wouldn’t be in this situation.

archived recording (kara swisher)

OK.

mike isaac

I wouldn’t be in this situation. Basically—

astead herndon

Wow.

mike isaac

Basically, that’s not us. That’s not what we do.

archived recording (tim cook)

We’re not going to traffic in your personal life. I think it’s an invasion of privacy. Privacy, to us, is a human right. It’s a civil liberty. And it’s something that is unique to America.

mike isaac

We believe that privacy is a fundamental human right. And that’s basically like saying, unlike Facebook, we actually care about your privacy.

astead herndon

That seems more explicit.

mike isaac

Right. And at that point, Mark Zuckerberg responds.

archived recording (mark zuckerberg)

The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay.

mike isaac

He goes on The Ezra Klein Show and basically throws it back in Cook’s face and says—

archived recording (mark zuckerberg)

I mean, look, if you want to build a service which is not just serving rich people, then you need to have something that people can afford.

mike isaac

The whole point of advertising is that we’re making our service free, and you don’t have to pay $1,200 or whatever exorbitant price to use our product, unlike some other companies in Cupertino, California, basically making the case that Facebook is the common man’s social network, free to use, and everyone can enjoy it. Just be willing to be targeted by personalized advertising.

archived recording (mark zuckerberg)

I think it’s important that we don’t all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you, because that sounds ridiculous to me.

mike isaac

So they trade some more shots in the press. And then in 2019, both sides think they need to have a talk. They need to come to terms and come to a peace between each other. And every year, there’s this retreat called Sun Valley that, basically, all the billionaires go to to commune with one another. And so Tim Cook and Mark Zuckerberg and their respective teams decide this is where we’re going to hash it out. So they get together in this room with a small group of executives from both companies. And Mark basically says to Tim, what would you do in this situation? The whole world is coming down on us. What would you do? And Tim’s response is essentially, I think you should delete every bit of information about people that you’ve collected outside of your main Facebook apps.

astead herndon

Wow.

mike isaac

Yeah. He’s basically telling Mark, in so many words, your entire business model is busted. And you need to fix it by destroying at least half of it. One person said that Mark seemed stunned. The C.E.O. of Apple telling you that your whole business model is broken and wrong probably wasn’t the best way to start out peace talks in this summit that they were supposed to have.

astead herndon

It doesn’t seem like someone who’s very interested in a peace talk to respond in such a fashion.

mike isaac

Right. And so the next thing that Tim Cook does—

archived recording (tim cook)

Together, we must send a universal humanistic response to those who claim a right to users’ private information about what should not and will not be tolerated.

mike isaac

—is announce this App Tracking Transparency feature.

archived recording (tim cook)

At its foundation, ATT is about returning control to users, about giving them a say over how their data is handled.

mike isaac

—that Facebook feels, rightly, is targeted directly at Facebook and its business.

archived recording (tim cook)

Some may well think that sharing this degree of information is worth it for more targeted ads. Many others, I suspect, will not. If a business is built on misleading users, on data exploitation—

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michael barbaro

We’ll be right back.

astead herndon

All right. So Mike, Apple premieres this new privacy initiative that Facebook takes as a direct statement of competition. What happens next?

mike isaac

Facebook starts really fighting back. For the past few years at this point, Facebook has been on the ropes. Apple has been the one throwing all the real punches. And Facebook essentially says, look, if you’re going after our business, if you’re going to the jugular at this point, we’ve got to do something.

archived recording (reporter)

Facebook just now publishing a blog post saying it’s speaking up on behalf of small businesses, saying, quote, “we believe Apple is behaving anti-competitively by—”

archived recording (man)

This seems like a very perilous escalation that Facebook is pushing here. Maybe they have to because what Apple plans to do strikes at the core of Facebook’s business model.

archived recording (woman)

What they’re saying is that once you eliminate that kind of targeting, then the ads just don’t become as valuable anymore, which is—

mike isaac

So Facebook starts talking to all its advertisers and a lot of the small businesses on the platform who buy ads on Facebook, basically saying, this is a huge deal. Bad things are coming for us. We need to push back on this. So it becomes corralling the advertisers and essentially creating this public P.R. campaign against Apple.

archived recording (monique wilsondebriano)

name is Monique Wilsondebriano. My husband and I are the founders and owners of Charleston Gourmet Burger Company. And today, I want to talk to you about the update from Apple and the impact that it is going to have on small businesses.

mike isaac

So Facebook is basically saying, we’re standing up for small businesses.

archived recording (man)

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.

mike isaac

Using our ad targeting platform on Facebook is good for the economy, and it’s good for these small businesses that are on the ropes.

archived recording (woman)

There is no possible way that our company could have reached the level of success that it is today without personalized ads.

mike isaac

We should all be pushing back against the big, bad Apple at this point.

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astead herndon

The idea that this multibillion-dollar corporation in Facebook is painting itself as a champion for small business seems kind of odd to me. It seems like it would raise some eyebrows. What are they doing there?

mike isaac

Yeah, you’re not alone there. But Facebook does have an actual point. Small businesses make up the majority of sellers on their platform. Small businesses on Facebook do rely on ad targeting tools to basically sell themselves and market themselves across the internet, especially during the pandemic when some retail shops might not have otherwise been able to reach people. So to some degree, there’s a point there, even if it’s a very self-serving way of posturing themselves like Facebook is using. But I think the other thing that Facebook is trying to point out here is that this really isn’t about privacy for Apple. This is really them just making a big power move.

astead herndon

What do you mean there?

mike isaac

Well, they positioned themselves as privacy advocates and warriors, but folks at Facebook are really frustrated because, for instance, Apple has an enormous business in China. Vast amounts of iPhones are sold in China, which arguably one of the most privacy-invasive governments and regimes on Earth, where the contract is that they monitor the behaviors of their citizens. They’re able to control what types of speech is being said online. They can censor certain types of speech against the Chinese government. And one of the things that Apple even had to do to operate in China was concede to a rule the Chinese government made where iCloud data must be stored in mainland China rather than servers in the U.S. or abroad as well as the keys to that data stored in mainland China. So rather than perhaps pull out of China entirely, which is one way they could have gone, they essentially had to concede and say, this is how we operate. This is how we have to do it in order to stay here.

So just in operating in China, Apple is being hypocritical in and of itself, some Facebook execs would say. Another point is Apple has this humongous search deal with Google that has lasted for years. Basically, if you open up your iPhone, Google search actually powers a lot of the things underlying in Apple’s software. So Siri is powered by Google search. So it can give you answers instantly because Apple just doesn’t have the search prowess of some of these companies like Google. And Google is just as privacy-invasive as Facebook, folks would say. You’re fine with getting in bed with Google, but for some reason, Facebook is the big bad guy here.

astead herndon

It seems as if they’re saying, Apple is situationally looking the other way when it’s an advantage to them.

mike isaac

Yeah, absolutely. And on top of that, you have Apple basically deciding to slowly beef up its existing small advertising business. Not many people know that Apple have an actual advertising business, but it’s significant. It’s inside of the App Store. You can essentially advertise against searches for apps inside of Apple’s store. So it’s not a huge business for Apple, but still, it’s this thing where companies like Facebook see Apple cracking down on the types of tracking and advertising capabilities of other companies while simultaneously improving Apple’s own advertising business. And they scratch their head. They say, what’s up with that?

astead herndon

If Apple has these deals with Google and with China, if it’s making this ad technology that is similar to what Facebook has, what then was the upside for them portraying themselves as a champion of privacy? Why did they make that choice if Facebook was going to come back and say, hey, but you’re doing the same thing too?

mike isaac

I think at the end of the day, Apple’s argument is stronger. It is easier for people to identify with, oh, hey, privacy is a good thing. I would prefer to be tracked less on my phone and in my activities than more. And Facebook’s argument is just, frankly, more nebulous. We’re standing up for small businesses. Therefore, we have to track you, or you shouldn’t be provided the option to opt out of being tracked. That doesn’t really track, so to speak, I guess. And so I think at the end of the day, Apple basically can wield this larger club of we advocate for privacy. We care about not monitoring your data for the most part. And the average consumer probably doesn’t know or care about a Google search deal or the search ads in Apple’s App Store that are pretty in the weeds and mostly cared about by businesses and ad tech people.

astead herndon

OK. So this is just a calculated marketing thing from Apple. And it seems in the way that you’re describing that they might be pulling this off, that they are both appealing to a customer that, on the surface, cares about privacy with things like this new tool that they’ve introduced, while at the same time, they are expanding their businesses in ways that compete with Facebook, compete with Instagram, and help them make money on the other side even if it goes against those privacy goals.

mike isaac

I absolutely agree. And I the— this is something I’ve asked myself for a long time, this paradox of, do people care about privacy? Do normal folks who are using their computers or their smartphones or who aren’t steeped in tech jargon all day like I might be— is this something that they actually are concerned with? My guess is that they don’t like the idea of something tracking them across the internet. The idea that someone’s watching you at all times is uncomfortable. I don’t like that. At the same time, people are using Facebook and Instagram in record numbers. Facebook did— I want to say $27 billion of revenue in the last quarter alone. They’re shattering records for user growth and revenue numbers every quarter. So there’s this tension, I think, in consumers where we want privacy, we gravitate towards this idea that we shouldn’t be tracked, but we also want the convenience and the entertainment that a lot of these apps bring. So I do think there’s a tension in it, and I think Apple is capitalizing on that tension to some degree.

astead herndon

So it seems like the public will go as far as to click on that button and block these apps from tracking them in many cases, but not as far as to throw their whole iPhone away or get off the internet or the apps that are tracking them altogether. So Apple still wins, and their competitors still lose because of a single button.

mike isaac

I mean, I think that’s right. The App Tracking Transparency prompt just rolled out very recently. Facebook is still in a watch and wait period, as are these other advertising companies. They want to see how people behave. The way that the prompt is framed, it’s pretty probably likely that people are going to opt out of it.

astead herndon

It’s like one of those leading poll questions that says, would you like this good thing to happen to you? Yeah, sure.

mike isaac

Exactly. Of course I do. And I think that’s what Facebook is expecting— everyone to be like, of course I don’t want to be tracked. And that’s kind of what we’re seeing already. There’s a survey or two floating around that says most users on iOS are opting out of this tracking option. So I think Apple wins this round. What I’m curious about are the fights to come.

astead herndon

What are some of those?

mike isaac

Yeah, look, these companies fight each other in a lot of different grounds. Messaging is one of them, gaming, podcasting. I think one big one that is a real question mark is V.R. and A.R., virtual reality and augmented reality. Both Apple and Facebook have secret wings in which they do all this high-tech development. And I think that’s going to be the battle of the next 5 to 10 years for both of them. And that’s still very much up in the air. All of the tech companies are essentially converging into this one area in which they compete with one another. The days of 2010, 2011 where they happily coexisted as friendly companies where the C.E.O. of Google might sit on Apple’s board, and they all were friendly rather than frenemies or even outright enemies, those are long over.

astead herndon

Why did that have to change? Everyone was making a ton of money. Everyone was growing their business. Why was that not satisfactory?

mike isaac

I think about this a lot. I feel like it’s really fundamental to how Silicon Valley operates. I think everyone loves to compete. If you are not expanding into a new territory, that means your competitor is, and you’re ceding territory. All of the companies in Silicon Valley basically see a space and go after it. And if you’re not doing it, that means someone else is. It says something about Silicon Valley. It says something about capitalism. It says something about how these C.E.O.s think and act. But competition is really the only code I think these C.E.O.s out here really live and abide by. And there’s no real rules around it except for you compete to win. And they all just respect that as that’s how it is out here.

astead herndon

Right. I’m asking why was it unsatisfactory to each maintain the slice of the pie, and you’re saying that Silicon Valley is structured that— our economy is structured in a way where these folks want the whole pie.

mike isaac

Yeah, go big or go home.

[music]

I don’t want a slice of the pie. I want the whole pie. That’s exactly what they’re saying.

astead herndon

Thank you, Mike. I appreciate your time.

mike isaac

Yeah. Thanks for having me.

[music]
michael barbaro

We’ll be right back.

Here’s what else you need to know today.

Weeks of unrest in Jerusalem turned into a wider conflict on Monday when militants in Gaza fired rockets toward the city, and the Israeli military responded with airstrikes. Officials in Gaza said that at least 20 people were killed by the Israeli counterattack. The violence is tied to an attempt by Israelis to evict Palestinian families from their homes in East Jerusalem to make room for Jewish settlers.

[non-english chanting]

For many, those evictions have become a symbol of the broader historical battle between Israelis and the Palestinians and since April has prompted angry clashes between Palestinians and Israeli police in the streets of East Jerusalem.

Today’s episode was produced by Stella Tan, Michael Simon Johnson, Diana Nguyen, and Eric Krupke. It was edited by Paige Cowett and engineered by Chris Wood.

[music]

That’s it for The Daily. I’m Michael Barbaro. See you tomorrow.