A fascinating debate is going on between the consumer technology giants Apple, Facebook and Google. For a while Apple CEO Tim Cook has been emphasizing privacy as an important feature of Apple products. Several times he referred to the practices of major Internet firms such as Facebook and Google as the opposite of how his company would act (usually without mentioning their name). And no matter how much hypocrisy one might believe to find in Cook’s words, there indeed is a fundamental difference between Apple and the two Internet juggernauts: Apple generates the lion share of its revenue with selling high-margin premium gadgets. Google’s and Facebook’s revenue streams are almost exclusively based on advertising. Google and Facebook need to know as much as possible about their users to be able sell more ads at higher prices. There is no way to deny this. Apple is much less depended on knowing each and every user action and preference. No matter how you slice it – and Apple’s security-related privacy issues aside – Tim Cook has a point.
Most recently he used this argumentation in an interview with The Telegraph. Cook said things like this:
“None of us should accept that the government or a company or anybody should have access to all of our private information. This is a basic human right. We all have a right to privacy. We shouldn’t give it up. We shouldn’t give in to scare-mongering or to people who fundamentally don’t understand the details.”
“Apple has a very straightforward business model,” he said. “We make money if you buy one of these [pointing at an iPhone]. That’s our product. You [the consumer] are not our product. We design our products such that we keep a very minimal level of information on our customers.”
“We don’t make money selling your information to somebody else. We don’t think you want that. We don’t want to do that. It’s not in our values system to do that. Could we make a lot of money doing that? Of course. But life isn’t about money, life is about doing the right thing. This has been a core value of our company for a long time.”
“The issue becomes when you begin to observe everything people are doing: read their emails, read their messages, monitor their browsing habits, really study everything about them and then connect the dots about these things.”
“Some companies are not transparent that the connection of these data points produces five other things that you didn’t know that you gave up. It becomes a gigantic trove of data.”
Just some days earlier Forbes published a lengthy interview with Sundar Pichai, senior vice president of products for Google and the “de-facto No. 2” at the company. In it, Pichai expressed what he thinks about Tim Cook’s recent pro-privacy stance and criticism of ad business models.
“Users use our services by choice. These are very loved products. We have many many products that have more than 1 billion users. They provide a lot of value. And we provide many of these services for free. It’s a bit irresponsible to say everything should be many hundreds of dollars [as most Apple products are]. We have figured out a way to provide important services to users responsibly. I think that matters. Most users if you ask them, they are comfortable with how it works.”
Certainly Pichai is mostly right, with the possible exception of the last sentence, which implies that all users would be aware of “how it works”. At the same time his words confirm fears that the right to privacy might become a privilege for wealthy people – those who can afford to buy a product “for hundreds of dollars”.
Comparing Pichai’s and Cook’s argumentation I cannot help to favour Cook’s line of thought. Despite knowing that I have benefited thousands of times from Google’s free services enabled by its advertising model.
Either way, Apple’s current communication strategy is highly interesting and might even end up forcing Google and Facebook to rethink their own stances to privacy and user integrity. Because it is unlikely that Tim Cook will stop his public criticism of governmental and commercial spying and data-harvesting. For him and Apple, it serves at least two major purposes: It rides on the growing anti-surveillance sentiment following the revelations of Edward Snowden and most likely will have a positive impact on sales, and it positions Apple as a company customers can trust. That itself is a necessary requirement for a company that wants to succeed with mobile payments, data-tracking wearables and the Internet of Things. These are highly personal products and services that require an extraordinary level of privacy and security measures as well as a high level of trust by customers’ into the company that provides these things. By promoting himself as a privacy messiah, Tim Cook is laying the groundwork for everything that Apple will do in the next years.
We’ll see how this arising conflict will play out. But it for sure will be entertaining, and most likely even quite healthy for a market that until now at large has been rather immun against privacy-related criticism. With a heavyweight like Tim Cook, who himself protected a personal secret for quite a long time, stepping into the ring and attacking the industry’s business practices, the situation might get uncomfortable for some of the big industry players.