Apple clearly has power, but it isn’t accountable

By John Naughton

The only body that has, to date, been able to exert real control over the data-tracking industry is a giant private company which itself is subject to serious concerns about its monopolistic behaviour. Where is democracy in all this?

A few weeks ago, Apple dropped its long-promised bombshell on the data-tracking industry.

The latest version (14.5) of iOS — the operating system of the iPhone — included a provision that required app users explicitly to confirm that they wished to be tracked across the Internet in their online activities.

At the heart of the switch is a code known as “the identity for advertisers” or IDFA. It turns out that every iPhone comes with one of these identifiers, the object of which is to provide participants in the hidden real-time bidding system with aggregate data about the user’s interests.

For years, iPhone users had had the option to switch it off by digging into the privacy settings of their devices; but, because they’re human, very few had bothered to do that.

From 14.5 onwards, however, they couldn’t avoid making a decision, and you didn’t have to be a Nobel laureate to guess that most iPhone users would opt out.

Which explains why those who profit from the data-tracking racket had for months been terminally anxious about Apple’s perfidy.

Some of the defensive PR mounted on their behalf — for example Facebook’s weeping about the impact on small, defenceless businesses — defied parody.

“We have evidence of its [real-time bidding] illegitimacy, and a powerful law on the statute book which in principle could bring it under control — but which we appear unable to enforce.”

Other counter-offensives included attacks on Apple’s monopolistic control over its Apps store, plus charges of rank hypocrisy – that changes in version 14.5 were not motivated by Apple’s concerns for users’ privacy but by its own plans to enter the advertising business. And so on.

It’ll be a while until we know for sure whether the apocalyptic fears of the data-trackers were accurate.

It takes time for most iPhone users to install operating system updates, and so these are still relatively early days. But the first figures are promising. One data-analytics company, for example, has found that in the early weeks the daily opt-out rate for American users has been around 94 percent.

This is much higher than surveys conducted in the run-up to the change had suggested — one had estimated an opt-out rate closer to 60 per cent.

If the opt-out rate is as high as we’ve seen so far, then it’s bad news for the data-tracking racket and good news for humanity. And if you think that description of what the Financial Times estimates to be a $350B industry is unduly harsh, then a glance at a dictionary may be helpful.

Merriam-Webster, for example, defines ‘racket’ as “a fraudulent scheme, enterprise, or activity” or “a usually illegitimate enterprise made workable by bribery or intimidation”.

It’s not clear whether the computerised, high-speed auction system in which online ads are traded benefits from ‘bribery or intimidation’, but it is certainly illegal — and currently unregulated.

That is the conclusion of a remarkable recent investigation by two legal scholars, Michael Veale and Frederik Zuiderveen Borgesius, who set out to examine whether this ‘real-time bidding’ (RTB) system conforms to European data-protection law.

“The irony in this particular case is that there’s no need for such an overhaul: Europe already has the law in place.”

They asked whether RTB complies with three rules of the GDPR (General Data Protection Regulation) — the requirement for a legal basis, transparency, and security. They showed that for each of the requirements, most RTB practices do not comply. “Indeed”, they wrote, “it seems close to impossible to make RTB comply”. So, they concluded, it needs to be regulated.

It does.

Often the problem with tech regulation is that our legal systems need to be overhauled to deal with digital technology. But the irony in this particular case is that there’s no need for such an overhaul: Europe already has the law in place.

It’s the GDPR, which is part of the legal code of every EU country and has provision for swingeing punishments of infringers. The problem is it’s not being effectively enforced.

Why not? The answer is that the EU delegates regulatory power to the relevant institutions — in this case Data Protection Authorities — of its member states. And these local outfits are overwhelmed by the scale of the task – and are lamentably under-resourced for it.

Half of Europe’s DPAs have only five technical experts or fewer. And the Irish Data Protection Authority, on whose patch most of the tech giants have their European HQs, has the heaviest enforcement workload in Europe and is clearly swamped.

So here’s where we are: an illegal online system has been running wild for years, generating billions of profits for its participants.

We have evidence of its illegitimacy, and a powerful law on the statute book which in principle could bring it under control — but which we appear unable to enforce.

And the only body that has, to date, been able to exert real control over the aforementioned racket is… a giant private company which itself is subject to serious concerns about its monopolistic behaviour. And the question for today: where is democracy in all this? You only have to ask to know the answer.

A version of this post appeared in The Observer on 23 May, 2021.

Review: ‘The Social Dilemma’ – Take #1

The Social Dilemma is an interesting — and much-discussed — docudrama about the impact of social media on society.  We thought it’d be interesting to have a series in which we gather different takes on the film.  Here’s Take#1…

Spool forward a couple of centuries. A small group of social historians drawn from the survivors of climate catastrophe are picking through the documentary records of what we are currently pleased to call our civilisation, and they come across a couple of old movies. When they’ve managed to find a device on which they can view them, it dawns on them that these two films might provide an insight into a great puzzle: how and why did the prosperous, apparently peaceful societies of the early 21st century implode?

The two movies are The Social Network, which tells the story of how a po-faced Harvard dropout named Mark Zuckerberg created a powerful and highly profitable company; and The Social Dilemma, which is about how the business model of this company – as ruthlessly deployed by its po-faced founder – turned out to be an existential threat to the democracy that 21st-century humans once enjoyed.

Both movies are instructive and entertaining, but the second one leaves one wanting more. Its goal is admirably ambitious: to provide a compelling, graphic account of what the business model of a handful of companies is doing to us and to our societies. The intention of the director, Jeff Orlowski, is clear from the outset: to reuse the strategy deployed in his two previous documentaries on climate change – nicely summarised by one critic as “bring compelling new insight to a familiar topic while also scaring the absolute shit out of you”.

For those of us who have for years been trying – without notable success – to spark public concern about what’s going on in tech, it’s fascinating to watch how a talented movie director goes about the task. Orlowski adopts a two-track approach. In the first, he assembles a squad of engineers and executives – people who built the addiction-machines of social media but have now repented – to talk openly about their feelings of guilt about the harms they inadvertently inflicted on society, and explain some of the details of their algorithmic perversions.

They are, as you might expect, almost all males of a certain age and type. The writer Maria Farrell, in a memorable essay, describes them as examples of the prodigal techbro – tech executives who experience a sort of religious awakening and “suddenly see their former employers as toxic, and reinvent themselves as experts on taming the tech giants. They were lost and are now found.”

Biblical scholars will recognise the reference from Luke 15. The prodigal son returns having “devoured his living with harlots” and is welcomed with open arms by his old dad, much to the dismay of his more dutiful brother. Farrell is not so welcoming. “These ‘I was lost but now I’m found, please come to my Ted Talk’ accounts,” she writes, “typically miss most of the actual journey, yet claim the moral authority of one who’s ‘been there’ but came back. It’s a teleportation machine, but for ethics.”

It is, but Orlowski welcomes these techbros with open arms because they suit his purpose – which is to explain to viewers the terrible things that the surveillance capitalist companies such as Facebook and Google do to their users. And the problem with that is that when he gets to the point where we need ideas about how to undo that damage, the boys turn out to be a bit – how shall I put it? – incoherent.

The second expository track in the film – which is interwoven with the documentary strand – is a fictional account of a perfectly normal American family whose kids are manipulated and ruined by their addiction to social media. This is Orlowski’s way of persuading non-tech-savvy viewers that the documentary stuff is not only real, but is inflicting tangible harm on their teenagers. It’s a way of saying: Pay attention: this stuff really matters!

And it works, up to a point. The fictional strand is necessary because the biggest difficulty facing critics of an industry that treats users as lab rats is that of explaining to the rats what’s happening to them while they are continually diverted by the treats (in this case dopamine highs) being delivered by the smartphones that the experimenters control.

Where the movie fails is in its inability to accurately explain the engine driving this industry that harnesses applied psychology to exploit human weaknesses and vulnerabilities.

A few times it wheels on Prof Shoshana Zuboff, the scholar who gave this activity a name – “surveillance capitalism”, a mutant form of our economic system that mines human experience (as logged in our data trails) in order to produce marketable predictions about what we will do/read/buy/believe next. Most people seem to have twigged the “surveillance” part of the term, but overlooked the second word. Which is a pity because the business model of social media is not really a mutant version of capitalism: it’s just capitalism doing its thing – finding and exploiting resources from which profit can be extracted. Having looted, plundered and denuded the natural world, it has now turned to extracting and exploiting what’s inside our heads. And the great mystery is why we continue to allow it to do so.

John Naughton

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