Apple and Facebook's brawl over privacy and products highlights why the industry needs to reinvent itself
Irony reigns the tech industry right now as the CEOs of its biggest ambassadors trade blows over issues that consumers have long complained about. Privacy, for instance, has long been a concern among social media users as they warily, but willingly, shared personal information on platforms. Those concerns came to the fore last month as reports emerged that the world’s biggest social media company, Facebook, was turning a blind eye to practices rampant among companies and political consultancies where they use compromised and actionable user data to fuel campaigns and promotions that affect, among other things, elections and the democratic process.
The CEO of the world’s most valuable company, Apple Inc, has lashed out against Facebook’s data policies. “I wouldn’t be in this situation. Privacy to us is a human right, a civil liberty,” Tim Cook said in a joint interview with MSNBC and Recode of Facebook’s Cambridge Analytica data scandal. Apple could make, “a lot more money if we chose to monetise our customers, if our customers were the product,” added Cook, but that they “elected not to”.
Cook’s statements gained rapturous applause and echoed sentiments by Apple’s co-founder Steve Jobs as far back as 2010, when he refused to allow Facebook access to its own ill-fated social media-based music platform Ping because of Facebook’s “onerous terms that we could not agree to”.
However, Cook also left Apple vulnerable to a tirade from Zuckerberg that could have lasting implications for the manufacturer: that Apple caters to product elitism more than consumer-centrism. In an interview with Vox in early April, he called Cook “extremely glib” while working for a company “that works hard to charge you more”.
“If you want to build a service that is not just serving rich people, then you need to have something that people can afford,” Zuckerberg said. “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.”
Apple’s tightly controlled user data practices aren’t shared by its competitors who are now overtaking its share of what used to be a lucrative smartphone and allied device market. The company’s refusal to grant the FBI backdoor access into locked iPhones in 2016, as well as its browser’s latest feature to prevent advertisers from tracking users while they surf the internet – much to advertisers’ chagrin – has afforded it significant public approval.
There are many in the industry, however, who view its stance on privacy a sales pitch to market products that otherwise are no longer at the bleeding edge of innovation. Major platforms, including Google Maps and Instagram, have abandoned Apple Watch apps, while iPhone sales are sluggish, resulting in manufacturing targets for its latest and greatest iPhone X being halved earlier this year.
The success of the technology world’s best-known names has been intertwined for the better part of the decade. Apple helped make the smartphone ubiquitous, allowing platforms such as Facebook to branch out into mobile apps that drove usage. Meanwhile, as “the face” of the internet in emerging markets, Facebook helped bring to light a new generation of consumers aspiring to own an iPhone.
Now, the debate over privacy could lead to lasting, or dwindling fortunes, for both. Zuckerberg said as much himself. “[Amazon CEO] Jeff Bezos had an excellent saying in one of his Kindle launches. He said, “There are companies that work hard to charge you more, and there are companies that work hard to charge you less,” he told Vox. Facebook will remain “squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use.”
However, with that business model, Facebook will continue to grapple with the Orwellian criticism it faces: if you aren’t paying for the service, you are the product. The problem isn’t endemic to Facebook either, but to virtually every other social media platform, and device manufacturer in the industry.
“Facebook’s business model, which critics call “surveillance capitalism,” is not unique,” says LinkedIn editor Queenie Wong, in her latest report. “Consumers share information about themselves to businesses every day, including what movies they watch, groceries they buy or restaurants they frequent. Technology has made it easier for personal data to flow quickly from one hand to the next”.
And that’s where the problem lies that the industry needs to fix. “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,” Zuckerberg said. Having an advertising-supported model “as with a lot of media… is the only rational model that can support building this service to reach people”.