Chief executives at Apple Computer and Facebook recently exchanged criticisms. During a lengthy interview by Recode's Kara Swisher and MSNBC’s Chris Hayes, Apple CEO Tim Cook responded to questions about Facebook's recent data security and privacy incident. The interview was conducted in Chicago, Illinois on Tuesday, March 27. It was broadcast on MSNBC on Friday, April 6, 2018. The relevant section of the interview:
"Hayes: We are back with Apple CEO Tim Cook. In the wake of the news about data scraping by Cambridge Analytica and Facebook, you had this to say recently, and I thought it was quite interesting. You said, "It’s clear to me that something, some large profound change, is needed. I’m personally not a big fan of regulation because sometimes regulation can have unexpected consequences to it. However, I think this certain situation is so dire, has become so large, that probably some well-crafted regulation is necessary." What’d you mean?
Cook: Yeah. Look, we’ve never believed that these detailed profiles of people — that has incredibly deep personal information that is patched together from several sources — should exist. That the connection of all of these dots, that you could use them in such devious ways if someone wanted to do that, that this was one of the things that were possible in life but shouldn’t exist.
Cook: Shouldn’t be allowed to exist. And so I think the best regulation is no regulation, is self regulation. That is the best regulation, because regulation can have unexpected consequences, right? However, I think we’re beyond that here, and I do think that it’s time for a set of people to think deeply about what can be done here.
Hayes: Now, the cynic in me says, you’ve got other tech companies that are much more dependent on that kind of thing than Apple is. And so, yes, you want regulation here because that would essentially be a comparative advantage, that if regulation were to come in on this privacy question, the people it’s going to hit harder aren’t Apple. It’s places like Facebook and Google.
Cook: Well, the skeptic in you would be wrong. (laughter) The truth is we could make a ton of money if we monetized our customer. If our customer was our product, we could make a ton of money. We’ve elected not to do that. (applause) Because we don’t... our products are iPhones and iPads and Macs and HomePods and the Watch, etc., and if we can convince you to buy one, we’ll make a little bit of money, right? But you are not our product."
The comments about regulation are relevant since Mr. Zuckerberg will testify before Congress this week about Facebook's privacy and data security incident involving Cambridge Analytica. Mr. Cook's comments highlight the radically different business models.
Mr. Cook's comments didn't sit well with Mr. Zuckerberg. Vox's Ezra Klein interviewed Zuckerberg on Monday, April 2. The relevant portion of that interview:
"Ezra Klein: One of the things that has been coming up a lot in the conversation is whether the business model of monetizing user attention is what is letting in a lot of these problems. Tim Cook, the CEO of Apple, gave an interview the other day and he was asked what he would do if he was in your shoes. He said, “I wouldn’t be in this situation,” and argued that Apple sells products to users, it doesn’t sell users to advertisers, and so it’s a sounder business model that doesn’t open itself to these problems.
Do you think part of the problem here is the business model where attention ends up dominating above all else, and so anything that can engage has powerful value within the ecosystem?
Mark Zuckerberg: You know, I find that argument, that if you’re not paying that somehow we can’t care about you, to be extremely glib and not at all aligned with the truth. The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay. And therefore, as with a lot of media, having an advertising-supported model is the only rational model that can support building this service to reach people.
That doesn’t mean that we’re not primarily focused on serving people. I think probably to the dissatisfaction of our sales team here, I make all of our decisions based on what’s going to matter to our community and focus much less on the advertising side of the business.
But if you want to build a service which is not just serving rich people, then you need to have something that people can afford. I thought Jeff Bezos had an excellent saying on this in one of his Kindle launches a number of years back. He said, “There are companies that work hard to charge you more, and there are companies that work hard to charge you less.” And at Facebook, we are squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use.
I don’t think at all that that means that we don’t care about people. To the contrary, I think it’s important that we don’t all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you. Because that sounds ridiculous to me."
What to make of this. While Mr. Zuckerberg is entitled to his opinions, an old saying seems to apply: people in glass houses shouldn't throw stones.
There seems no question that Facebook built a platform which collected users' intimate and sensitive information, tracked users around the internet, allowed "advertisers" to collect information about both users who interacted with a quiz app and users' friends (without their friends' knowledge), allowed "advertisers" to target groups of users (regardless of the law and/or consequences), and made it easier for "advertisers" to combine data collected with information from other sources. You may remember, Facebook's "friction-less sharing" program in 2011, where apps automatically posted content in users' timelines without users active involvement. And, Facebook's history with a convoluted and often confusing interface for users to change their privacy settings.
You may remember, it was Apple which fought to protect its customers' sensitive information by resisting demands by federal law enforcement officials to build back-door hacks into its devices. I don't think Facebook can make a similar claim about protecting users' information. Actions speak louder than words.
Nobody forced Facebook to build the platform it built. Its executives made choices. And now, Mr. Zuckerberg is apologizing (again) for his company's behavior. You may remember, an admission of problems and promises to do better by Mr. Zuckerberg in January. Facebook COO Sheryl Sandberg also apologized last week about the executive failures in 2015. You might call it the #Facebookapologytour.
Mr. Zuckerberg's "an advertising-supported model is the only rational model" comment deserves attention. The only model? Mr. Zuckerberg and Facebook made the decision not to charge monthly fees. Would some users pay a monthly fee for guaranteed privacy? I imagine many users would gladly pay. I would. (An Apple co-founder is willing to pay, too.) It seems, a more accurate statement would be: an advertising-supported model is the profit-maximizing model.
Also, Mr. Zuckerberg's "advertising-supported" description of his company's business model seems disingenuous. It gives the impression that traditional advertisers pay money to passively display ads, while the reality is much more. More types of companies than traditional advertisers used the social networking service's sophisticated software tools (e.g., Facebook's API platform) to target groups and then collect data about Facebook users and their connected friends.
This makes one wonder how many other companies like Cambridge Analytica have harvested information -- either directly or indirectly via intermediaries. Facebook has suspended the account of Cubeyou, another alleged data harvester, while it investigates.
If there are more companies and Facebook executives know it, then they must admit it. Its March 21st press release promising to investigate all apps that had access to large amounts of information, and to conduct full audits of any apps with suspicious activity suggests that Facebook doesn't know. I'm not sure which is worse: knowing and not saying, or not knowing.
According to news reports, Cambridge Analytica paid sizeable amounts - US $ .75 to $5.00 per voter - for profiles crafted from Facebook users' information. Do that math... that could be amounts ranging from $1.5 to $10 million, allegedly based upon 2 million users from 11 states: Arkansas, Colorado, Florida, Iowa, Louisiana, Nevada, New Hampshire, North Carolina, Oregon, South Carolina, and West Virginia. Nobody pays that amount of money without expecting satisfactory results.
Later today, Facebook will inform users whose information may have been harvested by Cambridge Analytica. What are your opinions?