New York Times, unlike borrow this this today the story of how a seemingly team software update, big a major battle in the long running between Apple and Facebook, Instead, Herndon spoke with our colleague MIKE Isaac, about what's at the heart of the conflict, and why the stakes had become so high for both com. it's Tuesday mail. So my can you tell me about this thing that apple for mere. At the other day, it seem pretty small,

come on, I'm gathering, it's not that small. Yet so the other day apple rules out this add that seems pretty. innocuous, I guess at first glance, when you're using apps on your Iphone. You may start to see this. It's the new tracking transport, It's nice, nice sounding woman's boys sort of telling folks, Hey we're gonna introduces new software in, and you know you might start noticing this prompt on the Iphone when you open certain apps, a choice on how apps use and share your data. It'll say you can allow acts to track you or you can ask them not to track you data, like your age location. Health information spending habits and your browsing history to name a few. They basically walked folks through whose idea that like thousands of pieces of information about you, reed and a digital profile that they sell to others. Some

on the Iphone are building entire profiles of information on you in and tracking your behavior across different apps, rather than when you're using the APS themselves has been happening without your knowledge or permission you are, information is for sale, you have become the product and what apple doing, is essentially very kindly pointing out. That's why I found users will now be asked. A single, simple question: allow abstract you or not here, button that you can use that will put right in front of you in the opening up to turn off and for the first time I find it without having to dig into your settings and look out it is our putting missing from you

We believe that you should have a choice: tracking transparency, a simple new feature that what's your data back in your control, you seems fine, whatever ok, but over at Facebook, they start freaking out, and in their minds over this waits, a wise facebook freaking out, I mean he's apple- is basically for the first time giving you know the millions of people they use, iphones a really easy choice to opt out of advertisers using their data to track them across the internet and for Facebook? That's that's based. Equally, the entire business model of how Facebook operates. Facebooks whole business is tracking you cross the internet to make adds that are served. You like the most accurate as possible. You can think of theirs actual customers as companies and advertisers who pay to place ads in your

feed in my feet when we use the I'm having targeted adds, have become our lives. I think about how Instagram feeds me advertisements for sneakers implants and matching jumpsuits, because I ve been tracking me across those other acts. So you're saying, if I click this button, but that be saying that I no longer one at that. I didn't know you were a jumpsuits we're having companies like Facebook, which owns Graham, they say they track you in order to make your personalized advertising experience even better in cities the you want to see in your feet. What I think apple is getting out here is essentially making that exchange more. In your face, basically saying what this is something that has been going on. If you want to opt out of it, that's fine. but you should at least have the choice to do so. So the surface the mental thing: can

go away with the software updating, with a click of a button that people sort of Bush when they open up the app and that's that's existential, that's the whole ballgame for Facebook business so that our Facebook sees this move by apple. But are they write? Should we think of this as apple directly targeting Facebook? I mean I think so you know. Basically, this is the biggest in a long line of of lawn simmering, sir back and forth between the company you, as they been sort of a cold war for the past ten years, a cold war. I didn't know that what you mean so for wine. Back to twenty two, twenty eleven era of Facebook and apple coexisting with one another. At this point there far from enemies. Actually pretty friendly. You know, I'm Steve Jobs and Mark Zuckerberg were go on these long walks in Apricot groves in Silicon Valley and with various heard of this very sort of like

men, torment, teaser, deferring. I think jobs were seen as like an elder statesmen at the time young founders and especially like mark on Facebook. Is this up and coming company used by hundreds of millions of people apple, has created the most popular consumer devise used by millions of people and they essentially have a kind of complimentary relationship, a really a symbiotic relationship. You know like you, can't use the Iphone without apps like Facebook, and you can't access apps like Facebook, without a great well founded doing an apple was the one to provide it really like at this point. They seem far from it sort of antagonism towards one another, but time, they started kind of playing in each other's spaces. To remember like twenty ten, eleven minutes the time that I moved from my blackberry to like during an actual smartphone dinner. I remember I bought an Iphone specifically start using Instagram, which is kind of embarrassing, but but

whenever owners making that switch and Mark Zuckerberg he realized. I dont only operating system. We will always be sort of subservient to apples rules or to Google's rules, and we need to change that, so he ends up developing their own smartphone, which you know Apple it is like oh ok, now your and our business now writer, another instance was basically met. Jane. You know apples, I message is used by millions of people and Facebook wants to be sort of owner of messaging services to his. So they start like just compare sitting in little areas. That didn't seem as obvious before so originally. These are two companies and to see owes that think of themselves, as very distinct have a good relationship. We are saying that change in the industry kind of push them closer and closer to one another where there now making services that they see us

equally competitive to one another, one hundred percent. Another thing that happens around this time is that Steve jobs. You know the founder of apple passes, away he dies of patriotic cancer and successor TIM Cook is number to come, then, and takes over the business and TIM cookies are very different. Ceo. He doesn't feel that p was data, and information should be come through by advertising companies and data brokers, who want to use that too who serve you ads and- and I think that these two companies that might have a friendly relationship that sort of becomes a little bit. I fear I would say, but I really think the crux of the turning point: four These two companies came in twenty, sixteen twenty seven team for money

thanks book has been under mounting pressure to be more transparent. After revelations, Russia used its platform to try to meddle in the twenty sixteen election, so Donald Trump was elected President Vienna, twenty sixteen and then slowly information starts come now about what role Facebook played in that election, one of my greatest regrets and running the company that we were slow and identifying the russian information operations and twenty sixteen we people start discovering o Facebook is used as a serve conduct four misinformation around how Americans think about each other if they say a russian group posted more than eighty thousand times during and after the election campaign, but a group that claim to be part of Texas but was in fact paid for by Russians in roubles those through the price tag of a hundred thousand dollars pushed divisive social issues from immigration to race,

gay rights and then there's the Cambridge analytical situation, Cambridge Analytical drilled, deep looking for a trove social media data on Americans to help republican presidential campaigns, fine tune their messages and win votes so back in twenty eighteen times on earth. What is this? lay a data leak in facebooks business, starting in twenty fourteen Cambridge Analytical funded a personality test on Facebook and paid people to take it wants a user answered questions the captured their friends. Information to the New York Times has viewed a portion of the raw data involved in this breach. So we know exists and we have every I believe it is still in the hands of cameras Yamba, despite their denials, Cambridge Analytical- is this crucial moment where face but was essentially pilloried by the entire world for being just totally reckless with user data, and I think that really had an effect on cook and on four.

apple. I think that really poisoned their idea of what Facebook was not this ideal it company, where they just trying to serve connect the world in and make everything pollyanna issue. I think it became a sort of darker thing and at that point, apple kind of decided Not only is privacy important to us we're going to make that a cornerstone how we market ourselves compared to other companies like Facebook can explain why, specifically apple with care that Facebook was in this contentious moment. I think there's the personal on in their professional one. I think TIM Cook actually does have a distaste for Facebook. this model at its core, but I also think there is really a professional business reason for doing this, and I saw Kindred Silicon Valley exact. A few more ago- and basically they told me, look if you competitors on the ropes like Facebook. Is you take a punch at a meeting

shouted amend. Essentially, you Usanga hit him while they're down, because you can still make your company look look better at the same time, and I think there is part of apple that recognised. We haven't I, maternity here and if we can use ourselves as a foil against in accordance with the invasive, data hungry company, that is Facebook, we can end up looking much better here, that's exactly what they did so, but this apple actually do then to capitalize on facebooks moment of weakness at this time. So, basically Apple has these events every year where they preview their software and one year they trot out these new features. One of them is: or safari their web browser and basically says we're: gonna kill off tracking cookies in Safari. What that means is essential. If you use the mobile web browsers on apples, phones, we're not gonna, let companies like Facebook or Google track you,

around the internet using those web browsers. Thank you for explaining cookies. I've never undressed that Macatawa, I do my job for one year and that was definitely big move that was apple, saying, look, we're cracking down on tracking in our web browsers far is used by millions, if not billions, of people who have iphones around the world. The other thing that they do I love your memory screen. Time came out. Basically the thing that tells us how terrible we are for being on our foreign awake. They they specifically introduce these products. We have a way to keep you on your phone less and in the dim out. I believe those instagram as the example of saying it Surely you spend way too much time on Instagram this week? Maybe you need to chill out a little bit and incite Facebook people in what way What are you doing? Why are you targeting at us like what it, whereas this coming from, so they have these

Easter eggs in their presentations and stuff and sighed. I version of attack fight for a little while, but then I think gets, moreover, from Chicago this revolution: Apple, changing the world TIM. Goes on MSNBC. Thank you for coming. I think they're all excited to get new. I found from one of our colleagues gears which are actually used in reviewing them at this point in says: Zuckerberg is hall in the Congress and they're getting essentially questioned or their role in the twenty sixteen election in how they use data, and you know the host ass really Margo What would you do? What would I do and cook without missing a beat says? I wouldn't be in this situation, I wouldn't be in this situation. Mason well, basically dislike that's, not that's not as this now will we do we

not going to traffic in your personal, your personal life, I think it's an invasion of privacy, privacy to us is a human right. It's civil liberty in something that is unique to America. We believed that privacy is a fundamental human right and that's basically like saying, like you know, unlike Facebook, we actually care about your privacy and that, whatever things more explicit rare, I mean look at that point. Mark Zuckerberg bonds that the reality here is that, if you want to build a service that helped connect everyone in the world, then there are a lot of people who can afford to pay due goes on me as recline shell and basically throws it back and cooks and says I mean look if you want to build a service which is not just serving rich people, then You need to have something that people can afford the whole point advertising is that we're making our service free and you don't have to pay twice

box or whatever exorbitant price, to use our products, unlike some other companies and Cooper, Tino, California, basically making the case that Facebook is the Commons man, social networks, you know free to use and everyone can serve enjoy it just be willing to be target. personalized advertising. I am, I think it's important we we all get Stockholm Syndrome and let companies that work hard to charge. You more convince you that there really care more about you, because that's that sounds ridiculous to me, so they trades more shots in the press and then in twenty nineteen. Both sides maintained at a talk any two legs or come too firms and come to a peace between each other. You know and Does this retreat called Son Valley that, basically, all the billionaires go to tat kind of commute with one another, and so TIM Cook and Mark Zuckerberg unnecessarily effective teams decide. This is where we're gonna have shut out, so they sir gets here

in this room with a small group of executives from both companies and mark. Squeeze says to tell me I will do what would you do in this situation? like the whole world's coming down on us. You know what would you do an TIM's response essentially in oh, I think you should do it every bit of information about people that you ve collected outside of your main facebook gaps, yeah? I mean it's basically telling me in so many words your entire business model is busted and you need to fix it by destroying at least half of it. In a way person said that Mark seem stunned. I mean this EU of Apple telling you that your Business model is broken and wrong, probably wasn't the best way to start out peace talks in this summit that they were supposed to have. It doesn't seem like someone whose very interested in the peace talks, terrorist violence and sets a facet ray

so the next thing that TIM Cook does together. We must send a universal humanistic response to those who claim a right to users, private information about what should not and will not be tolerated is announced this app tracking transparency feature at its foundation. Eighty tee is about returning control to users about giving them a say over how their data is handled than Facebook feels rightly is targeting directly at Facebook and its business. Some may well think that sharing this degree of information is worth it for more targeted adds many others, I suspect, will not if a business is built on misleading users on data

all the way back. According to the Federal Reserve, the average net worth of white families is nearly seven hundred percent higher than black families must mutual a proud sponsor of black history. Can Can you believe that regional inequality is driven by a disparity of economic opportunity and that we can all help ended with a growing MR programmes that support minority business and fun black education? Mass mutual is working to close the gap and help people in all community secure their futures and protect their loved ones, learn more at mass mutual. That com are some like Apple Vermeer's, this new privacy initiative that Facebook takes as a direct statement of competition.

what happens next. Facebook starts really fighting back here for the past few years. At this point, Facebook has been on the ropes apples been the one throwing the real punches. An facebook essentially says: look if you're going after our business regarding the jugular. At this point, we gotta do something Facebook jets now publicly blog posts saying it's speaking up on behalf of small businesses, saying quote we believe the apple is behaving airtight competitively by using this seems like a very perilous escalation that Facebook is pushing here. Maybe they have too, because what apple plans to do strikes at the core of facebooks business model, where there are saying, is that once you eliminate that kind of targeting, then the answer is don't become as viable anymore, which is so. Facebook starts Tom, no, all its advertisers and a lot of small businesses and laugh from who, by ads on Facebook, basically say like this is a huge deal by bad.

things are coming for us. We need to push back on this so, like you know it, corralling the advertisers and essentially creating this sort of public pr campaigns against apple It is money well spent every. I know my husband and I are the founders and owners of trusting balmy burger company, and today I want to talk to you about the update from apple and the impact that it is going to have on small businesses, and so Facebook is basically saying we're standing up for small businesses brow frustrated, we're all doings coded, unfortunately, the other thing that's coming up, which is an update to apples

you know or using our and targeting platform on Facebook, is good for the economy and good for these small businesses that are on the ropes. There is no possible way that our company could have reached the level of success than it is today without personalized eyes. We should all be pushing back against a bit about airports, supported the idea that this multi billion dollar corporation Facebook is painting itself as a chair for small business, seems kind of odd to me. It seems like it. What raise some eyebrows? What are they doing here yeah, you're you're, not alone there, but I mean fist does car of actual point in small businesses make up. The majority ready of sellers on their platform, small businesses on face.

Do rely on ad targeting tools to basically sell themselves and market themselves across the internet, especially during the pandemic. When some real I'll shops might not have otherwise been able to reach people so out, I'm your green. This desert disappoint there. Even if it's a kind of self serving wave of posturing themselves like Facebook is using, but but I think the other thing that Facebook is trying to point out here is that this really isn't about private C4 apple. This is really them he's, making a big power move. What do you mean there? You have it? Will they position themselves as overseas sort of advocates an wires by proxy facebook? You really frustrated because friends apple, has an enormous business in China, like vast amounts of ivory are sold in China, which arguably one of the most privacy invasive, governments and regimes on earth where the contract is

they monitor the behaviors of their citizens, are able to sort of control. What types of speech is being I have said on line, they can serve sensor. Certain types of speech against the chinese government, and one of the things apple even end due to operate in China was concede to a rule chinese government made where I cloud data must be. Stored in mainland China, rather than servers in the U S or abroad as well as the keys to that data stored in mainland China, so other than perhaps pull out China entirely, which is one way they could have gone they. Essentially, concede and say this is this is how we are This is how we have to do it in order to stay here so just in operating China, apples being hypocritical in and of itself some facebooks except to say another point is apple. Has this humongous search deal with Google that has lasted for years, based

if you open up your Iphone, Google search actually powers allow. the things underlying an apple software, so serious, our by Google Search, so I can give you answers instantly because Apple just doesn't have search prowess. As some of these companies like Google and Google, just privacy invasive as Facebook. Facebook folks would say it like a you, your fine, with getting better with Google, but for some reason Facebook is the big bad guy. Here it seems as if they're saying Apple is set wastefully looking the other way when it's an advantage to them yet absolutely. and on top of that, you have Apple basically deciding to slowly beef up its existing small had written as in business, and how many people know that apple have an actual advertising business, but you didn't know it significant it's inside of the app store you can essentially advertise against searches for apps inside

apples Appstore. So it's not a huge business for apple, but it still it's this thing: where companies like Facebook see Apple sort of cracking down, the types of tracking and advertising capabilities of other companies, while simultaneously proving their own apples, own advertising, business and they sort of scratch your head. They say you what's up with that. If apple has these deals with Google and with China, if it's making this ad technology that is similar to what Facebook has, what then was the upside for them portraying themselves as a champion of privacy? Why did they make that choice? If Facebook was gonna, come back and say, hey but you're The same thing to I think at the end of the day, apples argument is stronger. It is easier for people to serve identify with oh, hey. Privacy is a good thing. I would prefer to be tracked less on my phone and

My activities than more an facebooks argument is, just frankly, more nebulous. You know like we're standing up for small businesses. Therefore, we you have to track, you are you shouldn't be provided the option to opt out of being tracks that doesn't really track, so to speak, I guess liking it. So I think, at the end of the day, apples basically can wield this larger club. Above we advocate for privacy. We care about sort of not monitoring your data for the most part and the average consumer. Probably doesn't know or care about a Google search deal or the search ads in apples, app store that are pretty in the way, It's an and mostly cared about by sir businesses and had tat people ok. So this is just a calculated marketing thing from Apple.

and it seems and then the way that you're describing that they might be pulling this up, that they are both appealing to a customer than on the surface, cares about privacy with things like this new tool that they introduce, while at the same time they are expanding their businesses in ways that compete with Facebook, compete with Instagram and help them make money. the other side, even if it goes against those privacy, go scenario. I absolutely agree, and I think the the sort of something else so for a long time. This paradox of two people care about privacy. You know like to normal. Folks who are using their computers at our smartphones? Who, who are steeped in tech jargon? all day like I might be, is this summer that they actually are concerned with my guess is that they don't like the idea of something tracking them across the internet,

The idea that some as watch you at all times is uncomfortable right, like I don't like that. At the same time, people using Facebook Instagram in record numbers Facebook. did twenty seven. I want to a twenty seven billion dollars of revenue. In the last quarter alone, there shattering records for user growth and revenue numbers every quarter, so there is tension. I thinking consumers, where we want privacy. We gravitate towards this idea that we shouldn't be tracked, but we so want their convenience in the entertainment that a lot of these acts bring. So I do think his attention and an end. I think apple is capitalizing on that tension to some degree, so it seems like the public will go as far as to click on that button and block these acts from tracking them in many cases

but not as far as to throw their whole Iphone away or get off the internet or the acts that are tracking them altogether, so apple still winds and their competitors still whose because of a single button I mean, I think, that's right. The app try, transparency prompt just rolled out in a very recently. Facebook is still emphasis watching wait period, as are these other advertising companies they want see how people behave the way that the prompt is framed, pretty probably likely people are now opt out of it in a like one of those leading pole questions that, as you know, would you like this good thing to happen to you exactly I, of course, I too, and I think that's what reason, expecting everyone deserve the like. Of course, I want to be tried, an that's what we are seeing already and others a survey or to floating around that says most users on I o s are opting

this tracking option, so I think apple wins this round. What I'm curious about are the fight to come right, whether some of those yeah, I mean look these companies fight each other in a lot of different grounds. Messaging is one of them. Gaming podcasting. I think one big one, that is a real question mark, is We are in a r virtual reality and augmented reality, both apple and facebook. like secret sort of wings in which they do others. High tech development- and I think that's gonna- be the battle of the next five to ten years, for both them and that still very much up in the air, all the tech companies essentially converging into this one area in which they compete with one another in the days of twenty and twenty eleven, where they kind of happily co, exist as friendly companies, where the seat you

Google might sit on apples Board and they all sort of like were friendly rather than freedom, user, even outright enemies. Those are long over. Why did they have to change? one was making a ton of money, everyone was growing their business. Why was that not satisfactory? I think I feel like it, Really fundamental task: can Valley operates. I think everyone loves to compete. If you who are not expanding into a new territory. That means your competitor is and your seeding territory. You know all the companies Silicon Valley basically see a sort of space and go after it, and if you are not doing it, I mean someone else's. It says something about the values of some member capitalism. It says something about how they see egos you can act, but competition is, really the only code. I think these egos out here really live and abide by

and there's no real rules around it, except for you compete to win then, and they all just sort of respect. That is as that's how it is out here, but I'm asking why. Why was an unsatisfactory to each maintain a slice of the pie and you're, saying that Silicon Valley is structure, that our economy is structured in a way where these folks want the whole by yet go bigger, go home. I don't want to size than I went online. That's exactly what they're saying Thank you MIKE. Take your time. Thanks for having me back.

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