Battle for digital privacy reshapes internet

Apple introduced a pop-up window for iPhones in April that asks people for their permission to be tracked by different apps. Google recently outlined plans to disable a tracking technology in its Chrome web browser. And Facebook said last month that hundreds of its engineers were working on a new method of showing ads without relying on people’s personal data. The developments may seem like technical tinkering, but they were connected to something bigger: an intensifying battle over the future of the internet. The struggle has entangled tech titans, upended Madison Avenue and disrupted small businesses. And it heralds a profound shift in how people’s personal information may be used online, with sweeping implications for the ways that businesses make money digitally.

At the centre of the tussle is what has been the internet’s lifeblood: advertising. More than 20 years ago, the internet drove an upheaval in the advertising industry. It eviscerated newspapers and magazines that had relied on selling classified and print ads, and threatened to dethrone television advertising as the prime way for marketers to reach large audiences. Instead, brands splashed their ads across websites, with their promotions often tailored to people’s specific interests. Those digital ads powered the growth of Facebook, Google and Twitter, which offered their search and social networking services to people without charge. But in exchange, people were tracked from site to site by technologies such as “cookies,” and their personal data was used to target them with relevant marketing.

Now that system, which ballooned into a $350 billion digital ad industry, is being dismantled. Driven by online privacy fears, Apple and Google have started revamping the rules around online data collection. Apple, citing the mantra of privacy, has rolled out tools that block marketers from tracking people. Google, which depends on digital ads, is trying to have it both ways by reinventing the system so it can continue aiming ads at people without exploiting access to their personal data. If personal information is no longer the currency that people give for online content and services, something else must take its place. Media publishers, app makers and e-commerce shops are now exploring different paths to surviving a privacy-conscious internet, in some cases overturning their business models. Many are choosing to make people pay for what they get online by levying subscription fees and other charges instead of using their personal data.

Jeff Green, the chief executive of the Trade Desk, an ad-technology company in Ventura, Calif., that works with major ad agencies, said the behind-the-scenes fight was fundamental to the nature of the web. “The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?” he said.

The fallout may hurt brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants like Facebook — but not for long. Instead, businesses that can no longer track people but still need to advertise are likely to spend more with the largest tech platforms, which still have the most data on consumers. David Cohen, chief executive of the Interactive Advertising Bureau, a trade group, said the changes would continue to “drive money and attention to Google, Facebook, Twitter.”

The shifts are complicated by Google’s and Apple’s opposing views on how much ad tracking should be dialled back. Apple wants its customers, who pay a premium for its iPhones, to have the right to block tracking entirely. But Google executives have suggested that Apple has turned privacy into a privilege for those who can afford its products.

For many people, that means the internet may start looking different depending on the products they use. On Apple gadgets, ads may be only somewhat relevant to a person’s interests, compared with highly targeted promotions inside Google’s web. Website creators may eventually choose sides, so some sites that work well in Google’s browser might not even load in Apple’s browser, said Brendan Eich, a founder of Brave, the private web browser.

“It will be a tale of two internets,” he said.

Businesses that do not keep up with the changes risk getting run over. Increasingly, media publishers and even apps that show the weather are charging subscription fees, in the same way that Netflix levies a monthly fee for video streaming. Apple declined to comment, but its executives have said advertisers will adapt. Google said it was working on an approach that would protect people’s data but also let advertisers continue targeting users with ads. Since the 1990s, much of the web has been rooted in digital advertising. In that decade, a piece of code planted in web browsers — the “cookie” — began tracking people’s browsing activities from site to site. Marketers used the information to aim ads at individuals, so someone interested in makeup or bicycles saw ads about those topics and products. After the iPhone and Android app stores were introduced in 2008, advertisers also collected data about what people did inside apps by planting invisible trackers. That information was linked with cookie data and shared with data brokers for even more specific ad targeting.

The result was a vast advertising ecosystem that underpinned free websites and online services.

But distrust of these practices began building. In 2018, Facebook became embroiled in the Cambridge Analytica scandal, where people’s Facebook data was improperly harvested without their consent. That same year, European regulators enacted the General Data Protection Regulation, laws to safeguard people’s information. In 2019, Google and Facebook agreed to pay record fines to the Federal Trade Commission to settle allegations of privacy violations. In Silicon Valley, Apple reconsidered its advertising approach. In 2017, Craig Federighi, Apple’s head of software engineering, announced that the Safari web browser would block cookies from following people from site to site. “It kind of feels like you’re being tracked, and that’s because you are,” Federighi said. “No longer.”

Plans remain in flux. Google will not block trackers in Chrome until 2023. Even so, advertisers said they were alarmed.

In an article this year, Sheri Bachstein, the head of IBM Watson Advertising, warned that the privacy shifts meant that relying solely on advertising for revenue was at risk. Businesses must adapt, she said, including by charging subscription fees and using artificial intelligence to help serve ads. “The big tech companies have put a clock on us,” she said in an interview.

Chen is a tech reporter with NYT©2021