Data Privacy War?


Are we heading towards a Data Privacy War between Tech Companies?

Nasdaq Apple, Google & Facebook stocks, end of november 2018


If you haven’t already done so, it may be interesting to hear Tim Cook’s, Apple’s CEO, speech on October 24th at the European Parliament. He took the opportunity to do his little marketing, of course. But, beyond his goals as a multinational company executive, what is interesting in his speech is the way he fiercely defends data privacy.

We discover a new characteristic of this businessman: aggressiveness. Indeed, we were used to a rather cautious Tim Cook, a conservative man, from a business point of view, someone who conveyed confidence precisely because of his moderation. Someone who could even become boring, especially in facing the inevitable comparison with his predecessor, mythic Steve Jobs. To what can we attribute this new approach?

During the last three months until yesterday, Apple lost 21% of its stock market value, for 11% of Google and 22% of Facebook. Nevertheless, the descent seems to have corrected since mid-November, after, let us not forget, the Black Friday campaign, that has existed in the United States since the 1960s and where it has traditionally had a huge impact. Is this a new trend or a slight fluctuation? To be followed up.

In any case, the corporation from Cupertino, since Steve Jobs’ era, has always promoted data protection as one of its core values. This despite the fact it has endured suspicions about it. For example, in 2010, in the United States, a users group filed a complaint against the company for selling user data to third parties. Some iPad and iPhone applications would be concerned.

In any case, without naming them directly, Mr. Cook talks about

“data industrial complex”

by referring most probably, among others, to Alphabet (Google, Youtube, Android…) and Facebook (Instagram, Whatsapp,…)

“Your profile is then run through algorithms that can serve up increasingly extreme content, pounding our harmless preferences into hardened convictions”

Would the wolf have decided to put the lamb’s skin on? Or is this a genuine defense of the right to privacy?
And he added, categorically:

“This is surveillance. And these stockpiles of personal data serve only to enrich the companies that collect them”

Mr. Cook probably chooses his words very thoroughly. And the word surveillance goes far beyond the usual vocabulary of corporate Big Data: surveillance is no longer a marketing word, but something else. Should we understand that Mr. Cook is trying to warn us of a danger that goes beyond the realm of business and that would squarely fit into the one of politics, or even the one of the police?

He also had a few words for Artificial Intelligence:

“For Artificial Intelligence to be truly smart, it must respect human values, including privacy. If we get this wrong, the dangers are profound. We can achieve both: great Artificial Intelligence and great privacy standards. It is not only a possibility, it is a responsibility.
In the pursuit of Artificial Intelligence we should not sacrifice the humanity, creativity, ingenuity that defined human intelligence”

By addressing the representatives of the European Union and concerning their new Data Protection Regulation:

“Thank you for your work, to your commitment to the possibility of human centered technology”

This clearly shows that Apple is strategically positioning itself on the side of the European Union and is head-on against other tech companies. Its goal here seems to be to regain the top of the smartphone market in relation to Android (Alphabet, Google, Youtube,…) A market, the smartphone market, that is beginning to show clear signs of maturity. And, at the same time, he would try to get rid of the suffocating pressure of an actual octopus of social networks, such as Facebook (Instagram, Watsapp). In this sense, it will also be interesting to see Microsoft’s position (Linkedin, Skype, Bing,…)

However, it is difficult to believe that there is only one large multinational company in the world that does not collect and trade data from its users. Since the 1950s, customer profiling has been constantly mentioned in marketing manuals. But this could vary depending on the case. For example, for Google and Facebook it could be an almost exclusive activity, while for companies like Apple or Microsoft it is not the case, because their diversification is huge.

Apparently, Apple’s new strategic direction would aim to relentlessly attack companies that are highly dependent on the data market. This would be for two reasons: one, to defeat them as competitors. The second reason for this strategy could be the wish for self-cleaning, regarding the respect towards user’s privacy.

This would achieve two goals: on one hand, to increase its market share in relation to competitors and, on the other hand, to achieve almost blind trust on the part of its users, who would therefore have no hesitation in sharing their private data over the networks, whether on iTunes or other online platforms.

The fact that Apple applauds the work of the European Union in defending data protection is very positive. But we must not forget that this corporation is huge, it has pretty much unlimited resources and, in the case of an investigation, the relationship between it and the public authorities would be comparable to the one between Goliath and David. Advantage Apple, of course. This could pose enormous difficulties for public authorities to detect potential breaches of the Data Protection Regulation.

In addition to that, the tech sector is already highly concentrated and this new Apple move, brought to its latest consequences, could lead to even higher concentration. We would actually be approaching “corporate government” in contrast to “democratic government” in a market, the tech one, which has shown a growing tendency to swallow up all the others. We can see that, for instance, in Amazon’s extraordinary expansion in all directions over the past three years.

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