In Silicon Valley, it’s hypocritical turtles all the way down

Did you catch that? In a series of announcements over the past few weeks, the data giants and surveillance capitalists have surrendered.

Oh sure, most of them are still hungry for all of your data all of the time. But they’ve quietly given up repeating the absurd fairy tale that most people are entirely happy to trade their data and privacy for online services. The new tactic is to tacitly admit that they snort and mainline personal data, but to position their habit as benevolent and socially productive, as opposed to the abusive and dangerous behavior of others. Let’s review how these sophistic gymnastics have played out.

Facebook, friend of the little guy

The big Facebook story last quarter was the boycott by major advertisers, right? You wouldn’t know that from the company’s second quarter earnings call, which instead celebrated how Facebook serves as a “lifeline” for “small and medium sized businesses around the world who leveraged our advertising platforms to connect with customers” in the context of Covid-19. Sheryl Sandberg added:

“[P]ersonalized advertising is a lifeline for businesses, especially small businesses who can’t afford broad campaigns aimed at mass audiences. . . . In today’s economy, when businesses are struggling and customers aren’t physically walking into their stores or restaurants, this is more important than ever. . . . As Mark discussed, regulatory and platform challenges threaten this lifeline for businesses, but we remain committed to doing everything we can to help them adapt so they can survive and thrive in the online economy.”

Facebook is a lifeline, folks! (The word was used five times during the call.) And this lifeline is threatened by “regulatory and platform challenges.” Translation: Privacy regulations like the GDPR and CCPA are killing small businesses! Efforts to prevent Facebook from sharing personal data among Instagram, WhatsApp, and Messenger (as in Germany, analyzed here) or to break up the company, would shutter storefronts and doom struggling owners like “Italian coffee shop owner Nicola Taranto.”

You may think that privacy is important. You may even, like the entire European Union, believe that it is a fundamental human right. Facebook wants us to know that by insisting on our privacy and restricting their ability to suck up our data, create psychographic profiles, and target us with manipulative advertisements, we’re actually placing our hands around the throats of the neighborhood Nicolas.

This suggests a new corporate slogan.

Palantir, friend of the big guy

Palantir? Wasn’t that the winner of the Triple Crown’s Belmont Stakes in 2013? No, that was Palace Malice.*  Most of us recognize Palantir as the communication and prophesying crystal used by Saruman in The Lord of the Rings film trilogy. Who would name their company after a tool used by the evil genius of Middle-earth? Why, co-founder Peter Thiel of course, the wannabe evil genius of Silicon Valley.

But Palantir wants you to know that they’re not happy with, and are nothing like, their neighbors in the Valley. (Located in Palo Alto for seventeen years after its founding in 2003, the company recently shifted the HQ to Denver.) In a strange hijacking of their pre-IPO S-1 document, Palantir’s CEO Alex Karp emotes at length about the abuse of consumers’ data by advertising-based companies.

“For many consumer internet companies, our thoughts and inclinations, behaviors and browsing habits, are the product for sale. The slogans and marketing of many of the Valley’s largest technology firms attempt to obscure this simple fact. The world’s largest consumer internet companies have never had greater access to the most intimate aspects of our lives.”

And in what could be read as a warning to Mark and Sheryl, Karp added:

“The bargain between the public and the technology sector has for the most part been consensual, in that the value of the products and services available seemed to outweigh the invasions of privacy that enabled their rise. Americans will remain tolerant of the idiosyncrasies and excesses of the Valley only to the extent that technology companies are building something substantial that serves the public interest.”

In other words, whereas Facebook would have us believe that they serve the public interest by helping coffee shops target advertising (oh, and coincidentally making billions for Facebook), Palantir insists that privacy must remain at the heart of public interest.

But what is the “something substantial” that Palantir offers? Karp says it plainly: “The construction of software platforms that enable more effective surveillance by the state of its adversaries.” Oh my. And hasn\’t it been established that not a few states have problems restricting surveillance to valid adversaries? It’s as if Edward Snowden, instead of leaking details about PRISM and other government surveillance programs to journalists, turned them into a pitch deck and launched a private company.

Palantir justifiably asks, as Ben Thompson puts it, “who should decide what data is collected, and how is it used? Should it be democratic governments . . . or should it be unelected and unaccountable executives and engineers in Silicon Valley?”

Fair point. Except . . .who decides whether a prospective client is consistent with Palantir’s declared “mission to support Western liberal democracy and its strategic allies”? The answer is, unelected and unaccountable executives in Denver! Since Palantir says it has customers in 150 of the 195 countries in the world, those executives necessarily have a rather loose notion of what counts as a Western liberal democracy.  

So maybe it’s:

Apple’s got your back . . .

Well we can still count on Apple to avoid – and maybe shield us from – this mudslinging, right? Indeed, as you’ve no doubt heard, Apple’s pending iOS 14 will take another big step in user privacy by making the identifier for advertisers (IDFA) opt-in on all new app installs. As noted in this detailed primer:

“Advertisers use the IDFA to identify iOS, iPadOS, and tvOS users across apps to deliver personalized and targeted advertising, run frequency capping, measure campaign performance, and attribute impressions and clicks to app installs.”

The identifier is particularly central to Facebook’s Audience Network, which places Facebook and Instagram campaigns on thousands of third-party apps. By combining the IDFA – which, unless disabled or reset is consistent across all apps on a given Apple device – with their own profile data, Facebook is able to finely target an ad, and app marketers can more productively target and track ad spend.

Most if not all of that will be vaporized when the IDFA becomes opt-in. But – breaking news – Apple announced on September 3 that the opt-in requirement will be delayed until “early next year” in order to give marketers time to adjust and to understand Apple’s privacy-centric alternative, SKAdNetwork.

So, Apple is to be commended for protecting user privacy with the opt-in, and commended again for delaying the implementation and reducing the turmoil for the annual $80 billion app install spend.

But here’s the thing. In parallel to all of this, Apple is building up its own app install advertising business – and in iOS 14 it is creating a separate permission for this network that is turned on by default.

Get it? Apple will insist on opt-in for third party app networks, including Facebook, but retain opt-out for its own! That’s not just cynical, it’s illegal in the EU (GDPR), seemingly unethical, corrosive of Apple’s brand image as the privacy cop, and more ammunition for the growing charge that Apple is an abusive monopoly.

In short:

* Come to think of it, Palace Malice could have been high on Peter Thiel\’s list of company names.