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--:-- Sean Rameswaram: Every so often, Apple drops a software update, then it asks you to download the update, Then you ignore it. And then it's like, remember this update? And you're like, yes, I still don't care.
--:-- Sean Rameswaram: And then it's like, you really should update. And then you accidentally hit yes one day and your phone restarts and you're like, no, my phone, I need it.
--:-- Sean Rameswaram: Or you have it set up to update automatically.
--:-- Sean Rameswaram: Tip of the hat to the pragmatism.
--:-- Sean Rameswaram: This week was one of those weeks where an update dropped. But this particular Apple software update was different because it upset one supremely powerful tech person.
--:-- Sean Rameswaram: Can you guess which one?
--:-- Sean Rameswaram: Did I adequately answer your condescending question? Yeesh, Mark.
--:-- Sean Rameswaram: Anyway, Sarah Morrison's here to explain she's a reporter at Recode.
--:-- Sarah Morrison: So Apple just made a change to its software that could fundamentally change both your privacy and the mobile advertising business.
--:-- Sarah Morrison: iOS 14.5, that's, you know, an update to the operating system, came on a Monday.
--:-- Sarah Morrison: And it's been subject of a pretty big fight between Apple and a small tech company whose business depends on advertising.
--:-- Sarah Morrison: You might have heard of them. They're called Facebook.
--:-- Sarah Morrison: And these tech behemoths don't fight in public very often, so it feels worth talking about.
--:-- Sarah Morrison: What about this 14.5 software update upset Facebook?
--:-- Sarah Morrison: Well, to get into what is so particularly upsetting to Facebook, I kind of have to get into like the mobile advertising business and like sort of the app economy and how it works.
--:-- Sarah Morrison: And I thought sort of the easiest way, most successful way to do that would be to just give you a specific example.
--:-- Sarah Morrison: Okay. So before and hopefully after the pandemic, I played roller derby.
--:-- Sarah Morrison: Roller derby is like the sport. It is a sport, yes. Like the sport on roller skates that you see depicted in popular culture sometimes.
--:-- Sarah Morrison: Yeah, it's people on skates going in a circle, hitting each other is probably what it's best known as.
--:-- Sarah Morrison: Roller derby?
--:-- Sarah Morrison: This is tomorrow. I mean, there was a movie about 10 years ago called Whip It, you know, like Drew Barrymore and Elliot Page and Eve.
--:-- Sarah Morrison: I just want to tell you all that you're my new heroes. You should come to tryouts on Tuesday.
--:-- Sarah Morrison: I don't think it's a very accurate depiction, but I do love the movie.
--:-- Sarah Morrison: Wait, Eve is in that movie? Hell yeah.
--:-- Sarah Morrison: Well, now I kind of want to see it more than I did before. Yeah, it's fun.
--:-- Sarah Morrison: And also Jimmy Fallon. Men, hold on to your cookies. It's the Hurl Scouts!
--:-- Sarah Morrison: Oh, now I don't want to see it again. That's your opinion. It's your opinion. You know, up to you.
--:-- Sarah Morrison: Anyway, I do the PR for my league, which means I'm in charge of advertising our bouts.
--:-- Sarah Morrison: And, you know, we want to sell tickets. And I want people to come and cheer for me because I do cool stuff.
--:-- Sarah Morrison: And we have a limited budget. And there's kind of a limited probably type of person who wants to see a roller derby bout in Yonkers.
--:-- Sarah Morrison: So I have to sort of advertise as certain categories of people.
--:-- Sarah Morrison: You know, people in greater New York City whose interests include roller skating, sports, women's sports, extreme sports, fitness, family-friendly events.
--:-- Sarah Morrison: You can bring the whole family to this event, and it's a lot of fun, and that kind of thing.
--:-- Sarah Morrison: And that means that, you know, some company needs to know who fits into those categories to target them for those ads.
--:-- Sarah Morrison: The company being like Facebook in this case? It could be Facebook, whatever company I choose to do the advertising through.
--:-- Sarah Morrison: Yeah. So how do they know who is interested in roller skating and Yonkers?
--:-- Sarah Morrison: How do they know? They collect data on them, don't they?
--:-- Sarah Morrison: Exactly. You know, mobile apps, companies will put trackers like in the app code and they'll put their trackers in like a bunch of them.
--:-- Sarah Morrison: So Facebook and Google are two of the biggest ones. They put their trackers in like thousands of apps.
--:-- Sarah Morrison: And there's other companies that do this too, probably never heard of most of them.
--:-- Sarah Morrison: And they'll just take all the information your device supplies through all of the apps that you have and they combine that together to get a profile of you.
--:-- Sarah Morrison: So if you just think of like all the apps on your phone right now and how when where you use them you know one company that had trackers in all of them could sort of infer your age your race gender where you live where you work what your job is your income marital status.
--:-- Sarah Morrison: Do you have kids? Do you want kids? Are you trying to have kids? Hobbies, interests, all that kind of stuff.
--:-- Sarah Morrison: And then they'll target ads to you.
--:-- Sarah Morrison: And that's just, that's a multi-billion dollar business that powers really most of the app economy now.
--:-- Sarah Morrison: This is like if I'm talking to my colleague, Sarah, about roller derby, all of a sudden, like the next day, maybe I see some ads for like roller skates when I'm Googling stuff.
--:-- Sarah Morrison: So I get that question a lot. Like people are always certain that their phone is listening to them.
--:-- Sarah Morrison: I'll never say never, but it's probably not actually listening to you.
--:-- Sarah Morrison: But yeah, there's a bunch of things, not just apps that you might do on your phone with your computer that, yeah, They're so good at tracking basically through all these different methods that it seems like they must be listening to your conversations.
--:-- Sarah Morrison: They're that good at it.
--:-- Sarah Morrison: OK, so it's definitely like if I Google roller derby and the next day I see like ads for roller skates while checking my email.
--:-- Sarah Morrison: I don't know about checking your email, but like, yeah, I mean, you'll see them on websites.
--:-- Sarah Morrison: I tried to buy a nightstand once and I've been haunted by ads for nightstands ever since.
--:-- Sarah Morrison: This is going to be a detour but I'm just going to ask this question for the many many people out there who have it yeah why is it this technology smart enough to know once you've purchased the nightstand so it can leave you alone because nobody wants to buy more nightstands after they buy some nightstands you know that's crazy yeah i've never i've never figured out how they're They're smart enough to know what you buy and then not smart enough to know that you don't need like two kitchen sinks.
--:-- Sarah Morrison: I don't know. Nobody knows. That is the eternal mystery.
--:-- Sarah Morrison: All right. Thank you for indulging my detour.
--:-- Sarah Morrison: But the point is, there is all sorts of code in our technology built and put there just to track what we might want to buy.
--:-- Sarah Morrison: Yeah, exactly. By inferring what your interests are and who you are.
--:-- Sarah Morrison: Is this the thing that Apple's changing right now?
--:-- Sarah Morrison: And is this why Facebook's mad at Apple?
--:-- Sarah Morrison: Yeah, pretty much.
--:-- Sarah Morrison: So like I said, Facebook is one company that has a bunch of trackers and apps.
--:-- Sarah Morrison: And how they can identify your specific device across all those apps is that iPhones send out an identifier.
--:-- Sarah Morrison: In iPhones, it's called an identifier for advertising.
--:-- Sarah Morrison: And now you can have the choice of if you want to allow apps to track you or not.
--:-- Sarah Morrison: When you open an app the first time, it'll say ask apps not to track you or allow tracking.
--:-- Sarah Morrison: And if you say, ask app not to track, then it won't send out that identifier.
--:-- Sarah Morrison: So what you do in one app stays in that app.
--:-- Sarah Morrison: It doesn't get combined with what you might have done in other apps that a company like Facebook has their trackers in.
--:-- Sarah Morrison: Which then cuts those companies off from this combined pool of data that is the source of a lot of this targeted advertising.
--:-- Sarah Morrison: So if you're a company who relies a lot on that data and targeted advertising and you've been cut off from that, then, you know, you're going to have to figure out a different way to make your advertising work.
--:-- Sarah Morrison: And if Facebook can't figure out a different way, what does it mean for them?
--:-- Sarah Morrison: How big a deal is this to their business?
--:-- Sarah Morrison: I mean, for Facebook itself, they obviously have a lot of other ways other than mobile apps to get data.
--:-- Sarah Morrison: Like they have the data that you give them willingly when you use Facebook.com, right?
--:-- Sarah Morrison: So they have a lot of sources of data also.
--:-- Sarah Morrison: This is something that cuts them off from some data but not all.
--:-- Sarah Morrison: But there are other companies that rely a whole lot more on that app data, and they're the ones that are probably more upset about it.
--:-- Sarah Morrison: They just haven't—Facebook has just been the noisiest, and they're also huge.
--:-- Sarah Morrison: So they're the ones getting the most attention for complaining.
--:-- Sarah Morrison: Is this a game-changer for privacy that Apple's finally getting on board?
--:-- Sarah Morrison: I mean, Apple's been for years positioning itself as the privacy first company because, you know, unlike it's Google or Facebook, it doesn't really have an advertising business, so it can do that.
--:-- Sarah Morrison: So it's, you know, part of the premium you pay for with an Apple device, you know, is privacy.
--:-- Sarah Morrison: This is them, you know, even further positioning themselves this way, taking that stand in a way that I don't think harms them as fundamentally as it would if a different company took that stand.
--:-- Sarah Morrison: And I think it's also where things are going just with the law.
--:-- Sarah Morrison: States are enacting privacy laws. Other countries are enacting privacy laws. People are more aware of their privacy.
--:-- Sarah Morrison: So Apple saying, yes, we also, you know, like we're the company that cares, you know, makes them look that much better.
--:-- Sarah Morrison: Sarah Morrison is what they call her at Recode but her roller derby name is actually Queen Elizadeth II she plays on Suburban Brawl you can catch her and her team at Suburbia Roller Derby up in Yonkers if and when we get back to normal less roller derby more big tech in a minute on Today Explained Thank you
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--:-- Peter Kafka: Apple made this big change in the name of our privacy. But the question I have is like, why were they letting these companies track us this way to begin with?
--:-- Peter Kafka: That's a pretty good question.
--:-- Peter Kafka: I think Apple has been probably asking itself that for a while.
--:-- Peter Kafka: They've been complaining about this kind of tracking for years, years and years and years, more than a decade.
--:-- Peter Kafka: And their complaints have gotten louder over the last few years.
--:-- Peter Kafka: We've seen regulation that's supposed to sort of cut down or at least get some of this tracking sort of under control.
--:-- Peter Kafka: If you've been to a website in the last couple of years, you probably had to click a button saying, I accept this.
--:-- Peter Kafka: It's basically giving the website permission to track you.
--:-- Peter Kafka: And of course, you have no idea what you're actually signing in on.
--:-- Peter Kafka: And what Apple's basically doing now is saying, all right, we're going to do this ourselves. We're going to put a stop to it.
--:-- Peter Kafka: We've been asking other people to do it. We're going to do it.
--:-- Peter Kafka: And Facebook is upset about this, as we established in the first half of the show.
--:-- Peter Kafka: What kind of relationship have these two behemoths had for the past decade or so?
--:-- Peter Kafka: They're frenemies.
--:-- Peter Kafka: This is a classic Silicon Valley frenemy relationship.
--:-- Peter Kafka: They both need each other.
--:-- Peter Kafka: Facebook needs Apple's iPhones to distribute its software.
--:-- Peter Kafka: And Apple needs to have Facebook on its iPhones.
--:-- Peter Kafka: If you bought a $1,000 iPhone and you couldn't get Facebook or WhatsApp or Instagram, you would call that a defective iPhone.
--:-- Peter Kafka: So they need each other to coexist, but they often fight and squabble.
--:-- Peter Kafka: Do we think that Apple consulted Facebook in this big decision it made and executed this week?
--:-- Peter Kafka: I'm pretty sure Apple did not go to Facebook and say, hey, here's a heads up. We're going to do this.
--:-- Peter Kafka: What do you think about that?
--:-- Peter Kafka: I think they've been fighting over it for years.
--:-- Peter Kafka: Facebook certainly knew what was happening.
--:-- Peter Kafka: They were telling their investors right away, this could be a problem for us.
--:-- Peter Kafka: So it's been on their radar for close to a year.
--:-- Peter Kafka: So obviously the big question for Facebook right now is its bottom line.
--:-- Peter Kafka: But it does seem like part of the conflict here is ideological.
--:-- Peter Kafka: Facebook is free but takes your data.
--:-- Peter Kafka: And Apple is really expensive but is trying to do a really good job on privacy.
--:-- Peter Kafka: I've seen so many privacy commercials.
--:-- Peter Kafka: It seems like it's basically their tagline right now.
--:-- Peter Kafka: Is that right?
--:-- Peter Kafka: Right now, there is more private information on your phone than in your home.
--:-- Peter Kafka: Think about that.
--:-- Peter Kafka: So many details about your life right in your pocket.
--:-- Peter Kafka: This makes privacy more important now than ever.
--:-- Peter Kafka: It didn't used to be their tagline, buy an iPhone because it's private.
--:-- Peter Kafka: But it certainly has become one now.
--:-- Peter Kafka: I can't imagine, honestly, that there's a single iPhone buyer out there who's buying an iPhone because they think Apple protects their privacy.
--:-- Peter Kafka: But Apple has been making this distinction between itself and the ad tech business for a long time.
--:-- Peter Kafka: It goes back to the Steve Jobs times.
--:-- Peter Kafka: Privacy means people know what they're signing up for in plain English.
--:-- Peter Kafka: And some people want to share more data than other people do.
--:-- Peter Kafka: Ask them.
--:-- Peter Kafka: At the time, he was calling out Google, and then they sort of trained their sites on Facebook.
--:-- Peter Kafka: Tim Cook gave a speech on something called Data Privacy Day, which I bet you didn't know existed, in January, where he didn't say the word Facebook, but he certainly directed a lot of barbed language toward Facebook.
--:-- Peter Kafka: What are the consequences of prioritizing conspiracy theories and violent incitement simply because of the high rates of engagement?
--:-- Peter Kafka: What are the consequences of not just tolerating but rewarding content that undermines public trust in life-saving vaccinations?
--:-- Peter Kafka: It is long past time to stop pretending that this approach doesn't come with a cost.
--:-- Peter Kafka: Which is pretty extraordinary to hear from anyone, let alone the CEO of Apple.
--:-- Peter Kafka: Has, like, Mark chipped back at Tim or anyone else?
--:-- Peter Kafka: Yeah but it more muted Facebook response is hey Apple is actually going after small business We standing up for small business because our clients are small businesses and they need this data that we harvesting to sell ads We're all frustrated. We're all dealing with COVID.
--:-- Peter Kafka: Unfortunately, there's this other thing that's coming up, which is an update to Apple's iOS.
--:-- Peter Kafka: Apple iOS update has the potential of bringing a big portion of my business to a screeching halt.
--:-- Peter Kafka: So Tim Cook is standing up for privacy.
--:-- Peter Kafka: Mark Zuckerberg, one of the richest men in the world, says he's standing up for mom-and-pop businesses.
--:-- Peter Kafka: Do we have any idea who's making the more compelling argument to people?
--:-- Peter Kafka: Like how people receive these, you know, feuding arguments?
--:-- Peter Kafka: That'd be a good survey.
--:-- Peter Kafka: My sense is no one is paying attention to any of this.
--:-- Peter Kafka: But now they will after our fine podcast.
--:-- Peter Kafka: This is going to be the game changer.
--:-- Peter Kafka: When that button, have you seen that button pop up on your screen?
--:-- Peter Kafka: I don't think I've updated yet.
--:-- Peter Kafka: Yeah, it might be updating automatically.
--:-- Peter Kafka: Mine just showed up the other day and I went to ESPN.com and I got one of those screens and it says, allow ESPN to track your activity across other companies, apps and websites.
--:-- Peter Kafka: Who's going to say yes, allow ESPN to track me when I'm not on ESPN.
--:-- Peter Kafka: If you think about it for any, any second, the buttons that you and I have seen for the last couple of years, it's not clear at all what they're asking us to do.
--:-- Peter Kafka: And Apple's being super Claire.
--:-- Peter Kafka: Do you want ESPN to track your activity across other companies, apps and websites?
--:-- Peter Kafka: Is this ultimately just marketing?
--:-- Peter Kafka: Is this just Apple trying to distinguish itself from everyone else?
--:-- Peter Kafka: I think two things can be true at the same time, right?
--:-- Peter Kafka: It can be a marketing edge for Apple.
--:-- Peter Kafka: We can even make it multiple things.
--:-- Peter Kafka: It can be a marketing edge for Apple.
--:-- Peter Kafka: It can be a way for Apple to distinguish itself from Facebook and Google when it comes to regulation, which is increasingly a big deal for all the tech companies.
--:-- Peter Kafka: And I think it's probably something that Tim Cook and other Apple employees believe sincerely is a problem.
--:-- Peter Kafka: And you mentioned Google and how Apple had early on trained its sites on Google.
--:-- Peter Kafka: Is Google updating its software so that Facebook and co. can't track us?
--:-- Peter Kafka: Any Google app you use on your iPhone is gonna be treated the same as a Facebook app or anything else.
--:-- Peter Kafka: And in theory, some of this stuff should affect Google as well in terms of its ad business, but they don't seem concerned about it at all.
--:-- Peter Kafka: You know, you tell Google what you want. You're searching for it. So they've got a very good sense of how to serve you an ad.
--:-- Peter Kafka: They also do this ad tracking stuff, but it's less important to them than it is for Facebook.
--:-- Peter Kafka: But we should also acknowledge the fact that Google makes a ton of phones themselves and are not changing their software, at least at present.
--:-- Peter Kafka: Yeah, the phone world is divided between Apple and Google.
--:-- Peter Kafka: I think Google has the predominant worldwide share of phones through their Android software.
--:-- Peter Kafka: They're not making any Apple-like changes.
--:-- Peter Kafka: And by the way, they pay Apple billions of dollars a year to get their search engine on your iPhone.
--:-- Peter Kafka: So it's not like Apple is completely free of ad tech and ad tech money.
--:-- Peter Kafka: They're taking billions of dollars of it from Google.
--:-- Peter Kafka: So ultimately, most of the phones out in the world, which are Google phones, aren't changing.
--:-- Peter Kafka: But a ton of phones out in the world that are Apple phones are.
--:-- Peter Kafka: However, both of these companies and Facebook are facing a raft of antitrust regulations, some lawsuits over the way they run their business.
--:-- Peter Kafka: Does this help Apple on that front?
--:-- Peter Kafka: I know that Apple thinks that it should be treated differently than the Googles and the Facebooks of the world.
--:-- Peter Kafka: And they've been quite clear about that privately and publicly for years.
--:-- Peter Kafka: As we've seen this new interest in sort of reigning in big tech, Apple said, hey, hey, just to be clear, we're not like the other guys.
--:-- Peter Kafka: We're just making these phones, these super expensive phones.
--:-- Peter Kafka: We're not raiding anyone's privacy.
--:-- Peter Kafka: We're not toppling democracy.
--:-- Peter Kafka: We're not causing genocide in Myanmar.
--:-- Peter Kafka: We're cool.
--:-- Peter Kafka: I think this probably helps them in that regard.
--:-- Peter Kafka: And ultimately, is it a good thing that these companies are kind of feuding in this way?
--:-- Peter Kafka: Does it end up helping us, the users?
--:-- Peter Kafka: The fact that you and I are talking on a podcast about a change in ad tech privacy policy on iPhones, which is pretty gnarly, sort of arcane stuff for most people.
--:-- Peter Kafka: It's a little niche.
--:-- Peter Kafka: I think it's good.
--:-- Peter Kafka: I think it's good that Apple is going to basically compel everyone who uses its phones to at least think for a second about what they're doing with their phone.
--:-- Peter Kafka: By the same token, I think it'd be good for people who buy $1,000 iPhones to know how and where those things are made.
--:-- Peter Kafka: They're made by people who are not getting paid a lot of money in China under pretty tough conditions.
--:-- Peter Kafka: You should understand what your role in the world is, I think, in general, and I think when it comes to technology, you should understand your role in that.
--:-- Sean Rameswaram: Thank you for helping us understand, Peter.
--:-- Sean Rameswaram: I do what I can.
--:-- Sean Rameswaram: Recode's Peter Kafka. Check out his podcast Recode Media.
--:-- Sean Rameswaram: I'm Sean Rameswaram for him. It's Today Explained. Thank you.
