Tech giants in brewing battle over tracking, ads

MARCH 7, 2021

Silicon Valley giants are drawing battle lines over personal data collection practices and targeted ads as the threat of regulation looms.

As Apple presses ahead with plans to give users greater control over their privacy, companies like Facebook and Google have aligned themselves over the latter’s more measured approach to scaling back tracking features.

In what was billed as the latest step toward data privacy, Google announced this week that it would not replace its tracking features used for personalized ads once it phases out its existing method.

That move came after Apple drew Facebook’s ire with its own anticipated anti-tracking feature, which could significantly affect the social media giant’s revenue given its reliance on targeted ads.

Experts and pro-privacy advocates say that while Google’s update may be a small step toward giving users more control over their data protection, the change may hurt Google’s rivals more than the company itself.

“Google and Facebook are sort of suffering from an image problem, that they’re invasive, whereas Apple is kind of protective of privacy,” said Vasant Dhar, a professor of information studies at New York University. “So I think this is a move by Google to come across as a kind of champion of privacy. But in fact, the motivations are manifold.”

“Regulators are about to take a deep dive into this whole ecosystem about how people are tracked, where the information is collected, how it’s used so far. So far, Big Tech has been kind of operating in the dark because there have been no rules and so they make the rules up as they go,” Dhar added.

Google said Wednesday it would not build alternative methods to track users after it phases out the use of third-party cookies, as the company committed to do last year. The plan, which does not cover mobile apps and is slated to start in 2022, has drawn support from Facebook.

“We’re aligned with Google, who like us, continue investment in technology to enable relevant advertising while supporting the free and open web,” a Facebook spokesperson said. “Building more tools that support privacy-protective personalized advertising and collaborating with the industry is how all companies in the ecosystem should move forward in service of people and businesses.”

It’s a stark change from the fierce pushback Facebook has placed on Apple over the impending launch of its App Tracking Transparency feature, which is set to be released in early spring. Facebook has run an all-out ad blitz bashing Apple over the feature, and framing it as harmful to small businesses.

A spokesperson for Apple did not respond for comment in response to Google’s plans.

The major difference lies in what Apple and Google are offering. Apple’s feature will require apps to gain users’ permission before tracking their data to use for personalized ads. Google, however, has not committed to stop tracking users entirely or put in place an opt-out system similar to Apple’s impending update.

Google has also touted a method, called Federated Learning of Cohorts, that would allow advertisers to reach users with relevant ads by “clustering” groups with similar interests.

“It doesn’t seem like what they’re doing will prevent some of the things that I’m concerned about when it comes to behavioral ad targeting,” said Jesse Lehrich, co-founder of Accountable Tech. “Putting people into cohorts or whatever based on behaviors that you surmise from their personal device or whatever – even if that data is not personally identifiable – it still creates in my mind a lot of the same problems in terms of the personalization of advertising and content.”

Given Google’s immense market power over the digital ad sphere, critics warn the changes may also have larger implications for rivals in the digital ad industry than for the tech giant itself.

Ad companies use Google’s third-party cookies as users search across the web, but the update would limit it from being used on Google’s dominant Google Chrome browser.

Nicholas S. Economides, a professor of economics at New York University, said the impact on Google will be “minimal” and “counterbalanced” by data Google collects directly from users, either from the browser or from its Android products.

“But the loss to third parties is significant. In some ways Google might present this as a great gift to consumers. But if you look at it more carefully, it’s a great gift to itself,” Economides said.

Google has also progressed in the past couple decades through artificial intelligence technology, and has further expanded into the physical world with products in people’s homes and cars, Dhar noted.

And while eliminating the use of technology to track users will not be a major setback for the company, he said it could boost their public image to rid themselves of the controversial method.

“It’s brilliant, in that they come across as champions privacy – … we’re not going to support this third-party tracking, it’s bad – but in fact, it’s not really going to affect them materially,” Dhar said.

Facebook has touted the use of personalized ads, arguing it is beneficial for small businesses and helpful for users to discover “products that are relevant” to their interests. Meanwhile, 98 percent of Facebook’s total revenue last year came from advertising, according to its quarterly earnings report, and the company warned in the report of challenges posed by the impending Apple update.

“Facebook in particular has spun this narrative that, ‘oh users really love personalized experience and seeing relevant ads, and that’s why we do all these things,’ ” Lehrich said.

But he argued that when presented with the “honest choice,” users would likely choose not to have their data tracked. He pointed to findings in a recent Accountable Tech poll that supported his claim.

The Accountable Tech survey found that an overwhelming 81 percent of registered voters said they would rather keep their personal data private even if it means seeing less relevant ads.

The poll also found that 73 percent of users oppose companies tracking their behavior online to collect personal data to target ads, and 63 percent of users said they oppose companies using artificial intelligence to serve them more relevant ads.

The poll surveyed 1,000 registered voters between Jan. 28-31 and has a 3.1 percentage point margin of error.

“I think that as people become more aware of how pervasive and how hidden right many of these processes are, we’re going to see a natural move toward people wanting more control over their information,” said Renee Richardson Gosline, a senior lecturer and research scientist at MIT’s Sloan School.

“There are many more competent competitors now,” she added. “And a competitive advantage will be to provide people customer experiences that make them feel empowered, that make them feel like they have agency, and that make them feel like the relationship to the servicer is one that is not exploitative.”