What is Apple's strategic motive with iCloud

Apple's privacy focus is insincere - and yet right

When it comes to one topic, Apple likes to be uncompromising: "Privacy is a fundamental human right," emphasizes company boss Tim Cook with beautiful regularity in his public appearances. A position that has earned Apple a lot of applause over the years, but which has a tiny problem: In reality, of course, it is not a deep-seated conviction, but a marketing announcement that is based on a rock-hard power calculation - and that on closer inspection is abundantly insincere.

A profitable deal

Apple's commitment to privacy always ends exactly where it stands in the way of its own financial interests. The most prominent example of this: The iPhone manufacturer collects somewhere between eight and twelve billion dollars from Google every year so that its search engine is preset on Apple's smartphones. Money that was largely generated through personalized advertising, which Apple is otherwise so fond of scolding, and which is only possible through the creation of comprehensive user profiles. But above all: Apple indirectly contributes to precisely these profiles by making Google the default choice.

When referring to this obvious contradiction, Apple is usually unusually pragmatic: Google is simply the best search engine, so it is in the interests of the user. In principle, however, one does not talk about the billions that one earns by turning a blind eye to privacy in this case. And of course it's not just about the Google deal: Over the years, Apple has made very good profits in a wide variety of ways from tracking users. Be it through data-collecting apps or just the existence of all the Facebook and Google apps on your own platform - without the iPhones would be considerably less successful. That is not to say that Apple should have blocked these apps, but this aspect should not be completely forgotten.

In China, Apple works differently

Another topic that Apple doesn't like to talk about is China. Because of monetary interests, they agreed to cooperate with the state and its comprehensive surveillance apparatus. For example, iCloud in China is operated by a local partner company instead of Apple. With this, Apple officially does not get its hands dirty, while the Chinese state has full access to the data stored by the users there at all times - and the keys to decrypt them. So the privacy of Chinese users doesn't seem to be worth that much. And neither does their freedom of choice, as Apple regularly censors apps at the request of the Chinese government - from VPN providers to protest apps.

Incidentally, that is also one of the points that clearly shows that this entire debate is considerably more complex than it might appear on the surface. For example, Google is foregoing the - financially extremely lucrative - Chinese market, as they do not want to submit to censorship rules and total surveillance. Attempts by the company management to regain a foothold here were terminated due to internal pressure. At Apple, however, the approach in China seems to have remained unchanged so far.

Anti-tracking

The current focus of the privacy debate, however, is Apple's announcement that it will take stronger action against tracking across apps and websites. As of iOS 14.5, all apps that want to use Apple's own advertising ID (IDFA) or other trackers must obtain the explicit approval of the user. This is formulated in such a way that even Google assumes that hardly anyone will agree to this - and to that extent will forego such tracking under iOS in the future.

From the user's point of view, this is a very positive development. But here, too, Apple's motifs are not quite as classy as they are portrayed. First of all, this is a measure that is intended to harm the competition. Current estimates assume that this measure alone would mean that Facebook and Google would lose sales of between five and 20 billion annually. While sympathy for the two largest data collectors of our time is likely to be limited for most, this could be a threat to the very existence of smaller providers.

Now, of course, one could say: What is the Apple supposed to bring about besides personal satisfaction? The answer to that: money. After all, this is likely to lead to some app manufacturers switching from advertising financing to a payment model - and here Apple is known to record up to 30 percent in every transaction. All of this also tightens Apple's - already extremely strict - control over its own platform.

Strange processes

What also makes Apple's approach appear in a rather strange light: At the beginning of January, the company presented new interfaces for all those who want to advertise on the iPhone or iPad under the name "Apple Ads Attribution API". These make it possible to collect much more detailed information about users - and the effectiveness of advertisements - than was previously possible. However, there is only access to it if the campaign is running via Apple Search Ads - Apple's own network. If you choose advertising networks from other providers, you will only get the much less detailed data from the older SKAdNetwork framework. Now, of course, Apple could change this fact later, but the temporal coincidence is astonishing - and with other providers it would probably have led to them being torn up in the air in the public debate.

Incidentally, all of this is also the reason why Google reacts so completely differently to the new tracking rules than Facebook - after all, Apple has learned that tightening privacy can be profitable, especially for platform operators. After all, the privacy argument can be used excellently to sell things in the public debate that would otherwise quickly cause a stir for reasons of competition. For example, Google may lose money in the short term through anti-tracking measures, in the long term its own position in the advertising market is even strengthened - after all, if you have a lot of your own data on billions of users, you are much less dependent on third-party information than the competition.

So all you have to do to get rid of a few annoying competitors is simply to follow the example of Apple with a certain amount of time lag - and that's exactly what you are doing with both Android and Chrome at the moment. There have recently been reports that Google also wants to restrict the use of the advertising ID on Android, the end of the third-party cookies often used for tracking on Chrome still takes time, but it is a foregone conclusion. This is a positive development for the users - rather not for the competition.

And yet ...

In light of these findings, the following may come as a surprise, but as insincere as Apple's approach may be, it is still correct. Over the years, the Internet has evolved into a completely out of control surveillance system where no one, really no one, has an overview of whose data is going where. In this respect - and rightly so - often criticized companies like Facebook or Google are only the proverbial tip of the iceberg. Behind the scenes there is a network of data dealers who are largely unknown and who spy on the activities of users. It is largely undisputed that this must come to an end. That this is likely to have negative side effects as well. At the same time, of course, it is difficult to feel sorry for those who have actively contributed to this system for years.

Is everything okay then? No. This differentiation is important in order not to lose sight of something else: The privacy argument must not hide the fact that behind it there is a tough exploitation - and an expansion - of one's own market power. And yes: not only with Google, but also with Apple. Because the fact that Android is the most widely used operating system in the world should not hide the fact that Apple not only reaps the most profit from all smartphone manufacturers, but also operates the most profitable app store. And that all the current steps are at the expense of many smaller providers, who in reality have no chance of escaping Apple's grip. (Andreas Proschofsky, February 20, 2021)