Commentary

Facebook-Funded Report Accuses Apple Of Depriving Consumers Of Choices

Facebook has made no secret of its opposition to Apple's new privacy settings, which prohibit app developers from tracking iPhone and iPad users without their permission.

The social media company not only ran a recent ad campaign imploring Apple to reverse course, but reportedly considered bringing an antitrust lawsuit against Apple.

Now, continuing its anti-Apple initiative, Facebook has funded a paper that claims Apple's new privacy settings somehow deprive consumers of choices.

“Apple’s update goes beyond any legitimate protection of users’ privacy interests,” University of Florida law professor D. Daniel Sokol and Harvard Business School associate professor Feng Zhu write in their analysis of Apple's new mobile privacy settings. “Apple’s iOS 14 policies reduce consumer choice under the guise of privacy.”

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Their conclusion rests on a series of assumptions that appear questionable, at best.

First, the authors contend that Apple's interface -- which tells consumers that an app is seeking permission to track them, and asks people to choose whether or not to allow tracking -- is “ominous and misleading” and will result in low opt-in rates.

Those low opt-in rates, in turn, will “decimate the ad-based business model” -- apparently because the authors think non-personalized ads won't command enough revenue for developers. The result, according to the authors, will be fewer free apps for Apple devices, which will push consumers toward either purchasing apps, or using Apple's proprietary ones.

There are some obvious flaws in this logic, starting with the idea that people won't opt in to tracking due to a supposedly misleading interface.

First of all, some evidence suggests that many people are opting in to tracking.

As for people who don't opt in, there's a simpler explanation than allegedly “ominous” language: They don't want to be tracked.

That rationale would be consistent with voluminous research dating back to at least 2009, when professors at University of Pennsylvania's Annenberg School for Communication and the University of California, Berkeley, School of Law released a study showing that two out of three web users don't want customized ads.

Subsequent studies confirmed those results. A Pew study from 2012 found that 73% of web users don't want to receive ads targeted based on behavior.

Two years later, Pew reported that around two in three adults want the government to restrict advertisers' use of people's personal information.

More recently, a Pew study from late 2019 found that 81% of American adults believe the risks of data collection outweigh the benefits.

What's more, consumers aren't just expressing these opinions to researchers. People are also doing so at the voting booth.

Last November, California voters approved a ballot initiative that expanded the state's already broad privacy law. That makes it harder for companies to use data about race, ethnicity, health, or finances for advertising, and aims to guarantee that consumers can opt out of ad-targeting based on their online and app activity.

Earlier this year, Virginia passed a new privacy law. Other states, including New York, are considering new legislation.

The authors also assert that Apple's use of the word of “tracking” is misleading, in part because it includes the sharing of email lists (or other identifiers) with ad networks.

“Apple’s definition of 'tracking' extends well beyond what most users would consider 'tracking' (i.e., following their activity throughout the internet),” the authors declare. 

The academics also suggest that ads are either targeted or irrelevant, without taking into account the possibilities of contextual advertising.

While much of their analysis hinges on dubious arguments, Sokol and Zhu raise at least one point that could warrant a closer look. They argue that Apple's policies unfairly advantage its own apps and services, which collect ad-targeting data on an opt-out basis.

“Apple’s own advertising service will play by an entirely different set of rules, giving Apple a significant advantage over competitors, whom Apple requires to adhere to the new policy,” the researchers write.

Apple does draw on data it has about consumers -- including the types of stories they read on Apple News and Stocks, as well as the music, movies and TV shows users download -- to serve them ads, according to its privacy policy.

The company's model -- which appears at least somewhat similar to Google's controversial Federated Learning of Cohorts -- relies on placing people into marketing segments of at least 5,000 people. Apple also says the data it uses is aggregated and doesn't identify individual users.

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