Privacy Wars: Will Apple’s App Tracking Transparency Disrupt the Tech Industry?

This promised change by Apple has already led to pushback. Google announced that it will stop using tracking tools that trigger the pop-up. Mail Online stated it may have to delete its Apple app and force readers to access content via its website. Facebook has bickered with Apple publicly and framed the decision as an attempt to undercut the business model used by Facebook and other free, ad-supported apps. 

While it’s easy to paint the complaints of pro-advertising companies as self-serving, it is certainly true that Apple’s privacy emphasis may help its bottom line as well. Apple is angling to be a one-stop tech company for everything. Whether it’s helping its users get in shape, collecting financial data, or mining other sensitive information, Apple wants its users to trust its hardware and ecosystem. Having such data requires strong privacy assurances to ensure customers are not creeped out. (Just ask the Amazon Halo what can happen if users don’t fully trust its privacy fundamentals.) In addition, this privacy move may increase Apple’s power over its app store and generate more money for Apple by funneling users to download applications through its app store, rather than through in-app ads.  

In a larger context, this fight heightens the drastically different privacy principles among tech companies. On one hand, companies such as Apple have argued that users’ control over their data is a fundamental principle and that the more the user controls, the better the experience will be for the customer. Other companies such as Facebook have argued that their advertisement model allows companies to better target ads at customers, thus giving customers a better experience by offering ads they might want to see, as opposed to ads that are irrelevant to the user. They have also further argued that this model ensures that users will always be able to use the platform for free, whereas, without ad-supported products, Facebook users would have to pay to access the platform.

The effect of Apple’s new privacy features on the ad-supported platform model may be the most interesting outcome. If this update affects this model as much as Facebook or other SaaS providers expect it to, it may jeopardize the effectiveness of the model in general. If users are not “paying” with their data, the platforms may become less attractive to advertisers, who leverage this data to create more effectively targeted ads. In the absence of this advantage over traditional advertising, the utility of the platforms for advertisers may decline. This impact could force ad-supported providers to rethink their business models.

Then again, innovation is the bread and butter of tech. As Apple and other providers start to implement more stringent privacy measures, ad-supported platforms and advertisers may simply create new technology to evade privacy regulations in a never-ending arms race. To wit: Proctor & Gamble may have already found a way around Apple’s privacy changes.