Apple’s digital privacy push is killing advertising, will Google follow suit?

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It’s a case of sacrificing one business for another, with little to gain for Google, but pressure from Cupertino might cause them to rethink

Under Tim Cook, Apple has made digital privacy a key part of its business. From public spats in Congress to hidden features on its platforms, Apple is now one of the few companies leading the charge in the battle for digital privacy. As the revelation of hacking software Pegasus, there has been no greater need for better privacy. Yet, despite Apple’s efforts, the push for privacy is not as widespread as you think. Apple’s iOS runs on just 26% of all mobile devices, as compared to 72% of Android devices in June 2021. On desktops and laptops, those numbers are worse. Apple’s macOS has a market share of just 15.5%, as compared to Windows’ 73%. Essentially, just a fraction of users worldwide are getting industry-level protection, at a consumer level. 

Despite being a small player, Apple has managed to leave a big impact. Over the years, the company has set the standards for digital privacy across its ecosystem of devices, pushing developers to jump on board. Some of the standards have also migrated to Android, with Google forced to catch up. 

Over the years, Android has often walked down a very different path as compared to iOS. Unlike Apple, Google has rarely had to ‘copy’ features from its rival, but digital privacy remains a stark exception. Thanks to Edward Snowden, the world is waking up to the dangers of not securing you digital devices, and Google is feeling the pinch. In the past, Google has copied features like vetting of apps on the app store, and creating a custom solution for biometric data. Now, it’s playing catch up with a host of other features as well, indicating that the pressure is well and truly on Google. 

Apple sets digital privacy standards

If Google has set the standards for mobile OS features and customization, Apple has done the same for digital privacy. The emphasis on privacy can be traced back to Steve Jobs, but it is in the Tim Cook era that it really took on an urgent new meaning.

Right from the start, Apple required developers to register and have their apps vetted before being released on the App Store. You can disagree with the company’s arbitrary rules and harsh enforcement, but they have worked. It was so successful that in 2018 Google was forced to introduce Google Play Protect. The program scans apps on the Play Store to verify their authenticity, and prevent apps from infecting Android devices with viruses. Think of it like a verified badge on Twitter, but for apps. It isn’t perfect, and the fact Google has been forced to play catch up means many apps have slipped under its radar, but it works. Whether you like it or not, consumers have benefitted. 

A screenshot of Google Play Protect on Android (Android)

In the same vein, it was reported in May 2021 that Google was launching app privacy labels, just like iOS had. Just like the App Store, the Play Store too will show what data an app collects, and how it will be used. Granted, not many people may know or care about these labels, but it is a significant update nonetheless. Having to publicly commit to a certain privacy standard will force developers to be more wary about their data collection practices. That’s not all Google is copying though. It’s also cracking down on unauthorized use of the clipboard. With iOS 14, Apple began alerting users when an app copied/pasted data from your clipboard. In April, it was leaked that the feature would be coming to Android 12 as well. 

Slowly you can see the pattern emerging. Apple creates a new standard for digital privacy, Google is forced to follow it. It’s not about competing with Apple, Android’s market share is far too large for them to care about that. Instead, this is an attempt by Google to ensure its customers don’t fall behind, and become easier prey for malware attacks like Pegasus. 

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Will Google go after ads?

With iOS 14.5, Apple introduced App Tracking Transparency (ATT) to iOS. The feature is simple, it allows users to pick and choose what apps can track them across iOS and the web, valuable information for advertisers. Tracking activity is used to sell targeted ads to you, it’s the reason you see ads on Facebook for products you just Googled. Now, you can turn it off with a switch (Settings > Privacy > Tracking). 

A screenshot of App Tracking Transparency on iOS 15

The feature has already had a devastating effect on advertisers. Around 75% of users have turned ATT on, which has ripped companies like Facebook, Amazon, and indeed Google from their biggest moneymakers. Analyst Eric Seufert predicts Facebook’s revenue would drop by 13.6% if that number jumped up to 90%. That’s millions of dollars lost, not just for Facebook’s advertisers, but Facebook itself. So naturally, the feature has been at the receiving end of a lot of scorn. Facebook and Apple have been involved in a very public spat about ATT, but despite Zuckerberg’s efforts, Apple appears to have won. Interestingly, Google was extremely silent about ATT, which brings up the question  –  what will Google do?

On one hand, ATT is also expected to hit Google’s advertising business, and take a significant chunk out of their revenue. On the other, the Android division will feel it has to follow Apple’s lead and introduce ATT on Android. What’s up for question here is if Google is willing to sacrifice its ads business for Android?  This is a very philosophical question for Sundar Pichai and team. Google’s ad business is responsible for 80% of the entire company’s revenue. It generated $147 billion in 2020, that is money Google desperately needs – to invest in quantum computing, artificial intelligence research, and its hardware. Sacrificing even a bit of it would be akin to chopping off a finger. 

On the other hand, Google doesn’t bring ATT to Android, and users either migrate to iOS (less likely), or suffer devastating consequences of digital privacy invasion. That could lead to either class action suits from consumers, or investigation from world governments. 

The future – a compromise on digital privacy

Either way, Google is in a tricky position. It cannot afford to contemplate for long either, users are getting increasingly vocal, and legal, about their digital privacy. Migrating to iOS may not be everyone’s cup of tea, especially since a vast majority of Android users are on budget devices. But these users can through social media and legal action force Google to act. 

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As right-wing governments around the world increasingly crackdown on privacy and digital freedom, there has never been a more important time for Google to act. Bringing ATT to Android might not stop the next Pegasus, or even activists from being jailed, but they will make it harder for people’s data to be collected and used. It’s one step forward. 

Given the current environment, it is possible Google will look to find a compromise. They may already be working on a system that can track users on the web, but is less invasive than the current cookie method. Apple’s differential privacy is an option here, but it is one of the many possible options.

A compromise, especially one created by Google, would allow the company to continue reaping the revenue of digital advertising, while ensuring Android customers receive the same level of care and privacy as iOS. This is, of course, pure speculation. It may be possible that Google could simply ignore ATT in hopes that it will die down without too much of an impact. Whether they will, only time will tell. 

Sources: Bloomberg, Forbes, StatCounter, The Next Web

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