Apple users can now decide who is permitted to collect their data. This is a disruption of the common link between digital advertising and data privacy.
It's just a quick click – and yet it could mean the end of a business model. When you click on "Privacy" in the iPhone settings, you will now find a new feature called "Tracking" at the second position. Tap it once, and with one click you can decide who is allowed to track and collect your data across various apps and websites through tech providers, and then aggregate it into an opaque conglomeration of personalized information. Tracking is at the core of a global business model worth about $80 billion annually. It's also at the heart of online commerce. But what is one click going to do about it?
A lot. With the new iOS 14.5 operating system, Apple introduced a feature that allows users to decide for themselves whether all apps are allowed to collect their data. This innovation has a long history. More than ten years ago, the late Apple founder and CEO Steve Jobs made his understanding of privacy clear to the public. "Privacy means people know what they're signing up for," Jobs said. At the time, that was also a reference to Google.
Tim Cook, his successor as CEO, takes an even clearer stance. "We could make a ton of money if we monetized our customers, if our customers were our product," Cook said in a 2018 conversation with U.S. tech journalist Kara Swisher. "We’ve chosen not to do that." Asked what he would do if he had to deal with the fallout from the Cambridge Analytica scandal as CEO of Facebook, Cook stated succinctly, "I wouldn’t be in that situation." That was a harsh criticism against Facebook. And it points to the big difference between two business models in the technology sector. One is based on the extensive exploitation of private data, the other relies on products that make data protection a quality feature.
Now before data privacy advocates begin to celebrate, let me put two dampers on this news. Tracking makes personalized advertising possible, and that can have its advantages. Ideally, you get the ads that really interest you. The matching between supply and demand works not by mass, but by class. This could even reduce the amount of advertising that appears on websites and in apps.
However, the reality is usually different. On Facebook and Google’s product families, one experiences impressively what this tracking means in practice. For example, if I send a friend a photo of a pair of sunglasses on WhatsApp and tell her they're beautiful, they'll almost certainly show up as a promotional post in my Instagram feed. Send an email about new garden furniture using Google's mail program, and suddenly almost every website you visit is flooded with ads for that furniture. So tracking has only partially improved the long-established ad advertising business model. Customization, yes, but reducing the flood of ads? Not a chance.
On the other hand, Apple is also not the new Mother Teresa of data privacy, but a company that precisely calculates what can benefit its own products. And that is exactly what is interesting here, because Apple passes on the power of the considered decision to the users. The company allows users to decide for each app individually whether tracking should be possible or impossible. So I can treat my favorite brand, my favorite shopping providers differently than an app that uses my photos and scatters the metadata around the web.
Apple's "App Tracking Transparency Framework" is a business model for freedom of choice and thus a disruption of the common link between digital advertising and data privacy. It is based on empowered consumers who know what they want. The default setting is the personal decision about what data one wants to share and how. Those who want to share everything can do so. If you don't want to share anything, that's fine too. Informed consent can be the basic principle of a very successful business model. Just like Kant: Have the courage to use your own freedom of choice.