Apple Data Business

“We’ve Never Been In The Data Business” Apple CEO Tim Cook. Really?

Tim Cook’s statement that there is no such thing and there has not been such thing as the Apple Data Business is difficult to believe, in my opinion. Here is my view on the data business of Apple and its in today’s information economy.

We Live In An Information Economy

This blog post is not about the recent Facebook data privacy affair. Neither is it about the good or bad aspects of data privacy. It’s about an information economy; the economy in which we live.

Who hasn’t heard a countless number of times that we live in an era of information explosion; that the number of connected devices worldwide grows at an ever-increasing pace; that data storage has become a commodity; and that when we receive something for free, we actually pay with our data?

The Data Business: Paying With Information

This last statement is a critical one. Companies exist to make profit, to maximize shareholder value. It therefore should come as no surprise that they seek ways to earn money. One way (the old, traditional way) is to charge money for the services that they offer. Another way (which is popular in today’s information economy) is to offer the service at no monetary cost, yet obtain from users data that can be monetized through other channels.

Innocent Apps With Extensive Permissions

How many times did a friend, a family member, a colleague, or even a stranger that you met at the airport, in a shop, in a bus/train or anywhere else recommend some App to you? A mobile App that you were unfamiliar with? An App that would be either very handy, or just cute? Or it would just make your life a bit more comfortable, or maybe it would just give you a few minutes of joy? A game; a photo processing App; an App that would provide a random quote every day; etc. The interesting thing with all these apps is that you (mostly) do not know who made them, i.e. you have no way to trust them; and yet you download them. By downloading the Apps you normally give them rights to access certain functionalities on your phone, e.g. access your phone’s memory (all your stored documents / photos), your address book (yes, all your contact data), your camera, your microphone and more.

Would You Give A Stranger A Copy Of Your Address Book?

If a stranger came to you on the street and asked for a copy of your address book, how would you respond? Probably you’d tell them off, thinking who this crazy person is, and why does he/she think you’d give them a copy of your address book with so much personal information.

But when you download an App of an unknown maker, you often give them the exact same permission: you give them access to your address book (and more than that). Have you ever thought about that? Before you know it, your whole address book might have been copied to the server of the App maker. And even if you decide to delete the App after 10 minutes, your data might have already been shared, and may now be stored on the server of some criminal organization, or a hacker, or maybe even on the server of an innocent App maker who simply has no robust security protocols, and thus your data is exposed to the world. You may have enjoyed a “free” App (i.e. you didn’t pay for it), but you paid with your data.

Apple, Google, Facebook, Microsoft, Samsung And Other Data-Rich Firms

Companies whose products and services have become embedded in every step of our lives nowadays have an enormous amount of data about us. Here are some examples.

Apple Maps and Google Maps Know Where You Are/Go

If you have an iPhone, Apple Maps will remind you where you have parked your car. In other words, it monitors your movements. Apple Maps knows where you go and when. It knows where you like going out at night. Where you shop. When you spend the night at another place than your own home. If you have a phone with Google Maps, Google knows the same details.

Facebook Knows Your Preferences

If you are active on Facebook, also Facebook knows your preferences, maybe even better than you do. Facebook knows where you go and with whom. It knows how much time you spend watching other person’s feeds. Which products you like. And it also know what types of comments you’re most likely to like (and therefore which products you’re most likely to like).

Your Address Book Is Broadly Shared

If you are using Apps which integrate with Facebook, LinkedIn, Twitter and other social media, these Apps probably have access to your contact list on your social media accounts. And if you’ve ever accepted the social media App’s suggestion to scan which of your contacts on your contact list or on some social media account have an account on this other social media account (so that you can connect), don’t be surprised when Facebook or LinkedIn suggests to you to connect with someone that you wanted to forget long ago, yet their phone number or email address is still captured somewhere. By the way, LinkedIn is now owned by Microsoft.

Private Chats On WhatsApp?

Since Facebook took over Whatsapp, Facebook also has access to all your chats. Yes, these chats that are totally private, just between you and that other person that you might not have wanted to connect to on Facebook. Well, too late. It’s interesting to think what extra insights about you Facebook can obtain by correlating this data with data from your own Facebook account.

Hardware “Back Doors”

Similarly, when you use a mobile phone of any hardware producer, you do not really know which software this hardware producer installed on the device, to obtain your data. As an example: Already in 2012 Australia banned China’s Huawei from participating in a tender for the country’s $38 billion National Broadband Network (NBN) due to cyber security concerns. Also the FBI has warned that Purchasing Huawei or ZTE (another Chinese manufacturer) products “provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.” At the same time, Huawei has acquired impressive market share in the mobile devices market. Consumers are attracted to the phone’s features and its price. They do not ask themselves whether some “back door” has been built into the devices.

Back To Apple’s Tim Cook’s Statement: “We’ve never been in the data business”

The reasoning presented here, the examples presented here, they all lead to one conclusion: a company such as Apple collects large amounts of data about the users of its products. It is probably true that unlike Google whose business model relies heavily on advertisers who need access to insights about consumers, Apple’s business model is more centered around selling its hardware and services. Yet Apple’s product design aims to make its usage “natural”, i.e. predict what you need. How can Apple’s Siri predict what we need if Siri does not have data about our preferences, and use this data? Tim Cook’s statement “We’ve never been in the data business” does not appear credible. You’d better acknowledge that you’re in the data business yet you guarantee consumers’ privacy, than try convincing that one of the largest IT and digital companies worldwide is not in the data business. In the age of an information economy, such a statement is not credible. In my opinion.

 

We’ve never been in the data business

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Ziv Baida

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