Why is Apple’s privacy policy so important?

This is a typical business theme, avoid looking at it from a technical perspective.

Apple refuses to unlock customers’ iPhones for authorities

Three years ago, Apple (ticker: AAPL) repeatedly rejected the request of the U.S. Department of Justice, choosing not to cooperate with law enforcement agencies to unlock the suspect’s iPhone, and even hesitating to file a lawsuit with the U.S. government (Apple once announced that just in 2018 year only, the company received a total of 25,829 requests from government units for access to user information). At that time, there was an uproar, and technological circles were watching the final result with breathlessness. Because the industry’s unspoken rules are to comply with the government’s requirements, only Apple dared to blatantly disobey, because Apple believes, and Apple also claims that once a user locks the iPhone encryption, even Apple cannot unlock the customer’s mobile phone. The final victor in this case was Apple, and it also won the trust from its customers, which invisibly widened Apple’s moat.

Because Apple has shown the world that only it can do it, and it will fight to the end for the privacy of its customers without compromise. There are two vignettes in the meantime: Bill Gates has repeatedly argued against Apple, saying that Apple should fulfill its civic obligations and cooperate with law enforcement agencies. Although Bill Gates later stated that the media misinterpreted his views on this matter. But Bill Gates’s remarks caused the previous announcement by Microsoft (ticker: MSFT) to repeatedly claim that Microsoft will defend customer privacy information and all previous related efforts have been erased due to his remarks. In 2017, Microsoft also went to court with the U.S. government for refusing law enforcement agencies to ask it to hand over e-mails from overseas customers. In another episode, Apple’s iPhone engineer had publicly stated that if the company forced him to open the back door to unlock the customer’s mobile phone in order to cooperate with law enforcement, he would resign in protest.

Not only that, Apple also publicly offered US$ 1 million to any hackers who could hack into the iPhone, declaring that the company attaches great importance to the security of its own devices. Apple previously disclosed to the media, Apple paid to an amateurs teen hackers because he find out iPhone product problems. Focusing on the protection of personal resources does not seem to have a direct impact on Apple’s revenue and production at first glance, but in fact it strengthens the aura of the Apple brand as much as the emphasis on hardware security. Apple has always insisted on strict control of its own software and hardware, as to which programs can be sold in Apple’s online store. This approach can effectively curb malware and convince consumers that the iPhone price is “reasonably expensive”. Apple CEO Cook continued to vigorously promote the iPhone’s data security selling points, successfully consolidating the reputation of the Apple brand and its profitability.

Forcing developers to disclose the collection of data

Apple requires developers to start from December 8, 2020, all applications on the AppStore must list which users’ data will be collected, and must comply with 4 principles:

  • The data collected should be minimized to ensure that the minimum amount of personal data needs to be obtained.
  • The device end is intelligent, ensuring that the user only processes data on the user’s terminal device as much as possible, and minimizes the transmission of data to the server and backend.
  • Strengthen security protection technology, which is the basis for realizing privacy protection.
  • Improve data transparency and controllability, and return the permission of the program to collect data to the user for decision.

Safari no longer supports cookies

In March 2020, Apple has officially released all versions of its browser, Safari, with the default option to prevent third parties from using Cookies to collect user data. This is a very important decision to ensure that users have been unknowingly collected their own information by all manufacturers for a long time.

New IDFA privacy features on iOS

This new privacy feature on iOS, the operating system used by iPhones and iPads, is called IDFA (Identifier for Advertisers). IDFA has a very large impact (especially for the technology industry and advertising industry). The root of the dispute comes from the unique device identification code that every iPhone and iPad has, called IDFA . Including Facebook, all companies in the mobile advertising sales business will use this advertising identification code to advertise and evaluate the effectiveness of advertising. Advertising IDs can also be used in conjunction with other technologies, such as Facebook’s pixel tracking and cookie tracking technology, to track across the entire network, so as to learn more about users. When iOS14.5 launched in 2021 is released, the default tracking policy will always appear as a pop-up window, because Apple forces all programs to obtain user consent first and display a pop-up window to ask for user consent to be tracked by the program.

Buildfire’s survey report pointed out that although the iPhone’s global market share is only about 15%, the consumption power of iPhone users is more than four times that of Android phone users. According to actual surveys, more than 80% of users will choose not to let mobile apps track IDFA. For this reason, as soon as Apple’s new privacy policy was publicly announced in 2020, it was immediately opposed by 16 European advertising associations. Therefore, after the announcement, it took a year to formally hit the road.

Facebook and Apple broke openly due to IDFA

Facebook (ticker: META) has repeatedly criticized Apple in the media because of IDFA. Facebook argues for reasons and believes that sharing data with advertisers can give users a better experience. Because most of profitable users of Facebook are from iOS. The United States is the famous iPhone Republic, more than half users are using iPhone. All major products of Facebook must be given priority to the iPhone version. The most important thing is that 97% of Facebook’s revenue in the first quarter of 2021 will come from advertising. Users choose not to let Facebook’s apps track. , Facebook can’t reach users, can’t put ads, it will kill Facebook. In August 2020, Facebook conducted a small-scale test on the iOS 14 beta version. As a result, advertising revenue dropped by 50%. This is why Facebook’s management team has repeatedly emphasized at quarterly earning conferences that this policy of Apple will severely impact Facebook’s revenue.

The Alphabet (ticker: GOOGL and GOOG) and Apple’s initiatives to help protect privacy have already put pressure on Facebook. Facebook’s business relies heavily on Alphabet and Apple. Because these two companies have the most popular operating systems and browsers, this provides them with incomparable advantages. Facebook is obviously at a disadvantage, and there is almost nothing to do and can only accept it silently.

Facebook publicly announced on 9/22/2021 that the iOS IDFA changes are hurting the number of advertisements, and the stock price fell 4% on that day.

China engages in CAID and wants to bypass IRDA

The China Advertising Association (CAA), which has an official background in mainland China, is developing the “Internet Advertising Identifier” (CAID) to help the company’s programs avoid Apple’s IRDA specifications, so as to collect information about the use of iPhone in mainland China, including mobile phones private information such as model number, language used, time zone, and even mobile identification code. Including ByteDance’s TikTok, Baidu (ticker: BIDU) and Tencent (ticker: TCEHY) and other Internet giants’ programs have adopted CAID to avoid Apple’s tracing. And even the industry’s largest advertiser Procter & Gamble  (ticker: PG) has participated in the test of this technology.

However, Apple has expressed its stance on this development. CAID has violated Apple’s privacy regulations and put programs that prohibit the use of any illegal schemes on the App Store.

Advertising industry’s contingency plan for IRDA

Advertising demand-side platform (DSP) operators such as The Trade Desk (ticker: TTD) have developed their own Unified ID to replace the old tracking method. Moreover, the Unified ID solution of The Trade Desk has begun to be widely adopted by the advertising industry.

Block tracking IP

Apple further announced in 2021 that it will restrict the ability of companies to track user online behavior and collect user information through data intermediaries. This change will impact a wider range of Internet traffic on Apple devices, and advertisers, email marketers, publishers and ad technology companies are expected to have an expanded impact. Apple’s default prevents users’ IP addresses from being transmitted to websites they visit in the Safari browser. Many companies collect user IP addresses and combine them with other data to accurately identify which users repeat visits. iCloud+ also provides a “private relay” function, allowing users’ network traffic to pass through multiple servers, obfuscating IP addresses, and preventing identification from being locked. Apple has also begun to crack down on email tracking. Most marketing emails have hidden designs that can collect user IP addresses and identify whether and when the recipient opened the email.

Alphabet’s relative scheme

Alphabet (ticker:s: GOOGL and GOOG) also, due to market, regulatory, and competition pressures from Apple, promised to end its Chrome browser support for Cookies in early 2022 to help protect privacy. In the past, even if Android users did not agree, software developers could still advertise to users through advertising IDs; but later, Alphabet prohibited developers from continuing to do so. Alphabet’s Android proposed a policy similar to Apple’s IDFA and launched its own version called FLoC (Federated Learning of Cohorts). Starting from the end of 2021, all applications on the Android 12 system must comply with the new privacy regulations, and in 2022, it will be expanded to all applications on the Google Play store. The view on the market is more biased towards the Alphabet. The solution proposed is a solution created for tracking in a way that protects user privacy. FLoC technology is to gather users into groups with similar interests to place advertisements. Everyone will share a code that represents their interests with advertisers. Alphabet claims that from a privacy perspective, this technology is superior to the current way of tracking users based on third parties. The scheme mentioned by the Alphabet to disable ad tracking pop-up windows is not placed in the most conspicuous place like iOS. You need to go to the service settings of Google Play to set it yourself. Simply put, if the user disables Google’s advertising ID through settings, advertisers will no longer be able to access this advertising ID.

The privacy policy is Apple’s policy, and gradually become its moats. If it is loosened or compromised, it will cause irreparable damage to Apple’s business. But from the current point of view, Apple’s oligopoly of the global mobile device market due to iOS’s mobile market and Alphabet’s Android; coupled with the substantial monopoly of iOS users’ spending power far ahead of the Android platform, Apple is still in this regard. Get the upper hand and win the overall (business interests, media, customer trust) victory.

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