Goliath v. Goliath on behalf of David!
Among the GAFA companies (Google, Amazon, Facebook, and Apple), a war is now being fought between Mark Zuckerberg, Facebook, and Tim Cook, Apple, which in the worst-case scenario could lead to Facebook leaving the market. This is a war where Goliath (Apple) is fighting Goliath (Facebook) on behalf of David (the customers).
146.000 photos a minute
The starting point is that Tim Cook is concerned about people's right to privacy and will prevent apps on Apple’s AppStore from unrestrictedly draining the iPhone of data. His argument is that the advertising industry has existed for a long time without having to link usage and location data between different apps over a long period of time at the individual level, in order to reach the target group with a good message.
His point of view hits Facebook in their heart as they use such data to gain insight into people's lives 24/7/365 and sell this insight to advertisers who want to hit better with their persuasive messages. Apple has a point.
Facebook owns Whatsapp, Instagram, and Messenger, which have 2.6 billion, 2 billion, 1.1 billion, and 1.3 billion users, respectively. Every minute, around the clock, all year round, 42 million Whatsapp messages are shared globally, 146,000 photos are uploaded to Facebook, 350,000 Instagram messages are posted, and 150,000 messages are shared via Messenger. In other words, Facebook knows a lot about its users - too much perhaps when the data is subjected to the algorithms' magic dust!
On collision course
Apple felt that enough is enough and changed the privacy rules of the operating system iOS14 for iPhone and macOS Big Sur on iPads and Macs. Mark Zuckerberg reacted spontaneously and took out large ads in national US newspapers where he argued that Apple would ruin all small and medium-sized businesses, which according to him was dependent on Facebook. A hollow argument, many would argue.
The collision occurs because there are two very different business models and business logics that oppose each other. Apple is a lifestyle brand. Part of the lifestyle they sell is that users have control over their private lives and want to help them do so. Facebook is an IT algorithm company that makes a living by collecting as much data as possible about users. The result is that Facebook users are no longer customers, but the product itself that serves Facebook's interests. Tim Cook’s action could be the trigger that causes the final phase for Mark Zuckerberg’s empire.
What is the essence of this story? The big question is whether companies should serve their customers or whether they should utilize the customers to serve their business? The triple-bottom-line movement and ESG reporting will argue that it is about serving their customers and taking care of people in the process. In other words, data gathering firms, ala Facebook, are on the wrong side of the history, according to Apple and Tim Cook.
The article was originally published in Dagens Perspektiv, 9. February, 2021.