Aral Balkan

Apple vs Google on privacy: a tale of absolute competitive advantage

15 Jan, 2015 Isn’t Apple just spyware, like Google?

Mac and iOS as stopgaps

Apple is a secretive company with proprietary products and a closed ecosystem. While that’s not ideal in the long-term, we have chosen Apple’s platform as a stop gap to launch the core of our distributed social platform.

Our long-term goals and vision remain unchanged.

In line with our Manifesto, we will build our own independent platform and that includes eventually having a device with independent hardware, software, and services. We’re in this for the long haul but we have to start somewhere. And we have chosen Apple’s platform as the place to start. This has, predictably, upset some people.

Isn’t Apple just spyware, like Google?

The main criticism I’m hearing about our choice of platform is “Apple is just as much spyware as Google”. And this just simply isn’t true. You don’t even have to like Apple to see why they’re different. You just have to understand the profit motive and the concept of competitive advantage.

The question isn’t "can they spy on you if they want to?" but rather “is it in their interests to spy on you?"

For Google, the answer is yes, it is in their direct financial interests to spy on you. Selling you is the primary means by which Google makes money.

For Apple, the answer is no, it is not in their direct financial interests to spy on you. Selling you products is how Apple makes money.

Spyware vs Regulation

Now think about what’s happening in the world: More and more people are waking up to corporate surveillance. This includes policymakers and politicians. Spyware corporations like Google are countering by increasing their lobbying (“OK, you see us for what we are now, here’s some money, does that make it better?”)

Regardless, it is clear that there will be (and already is) increased regulation.

Some of that regulation could seriously harm Google (which is why they’re spending so much on lobbying). When I talked to Eric Schmidt last year, he told me that he spends every day “fighting regulation” and that regulation "could kill Google". Not immediately, of course, and not even entirely, but slowly, over time, it could kill what Google can become if left unrestricted.

So we are increasingly living in a world where privacy is becoming competitive advantage. This is bad news for Google because privacy is the one area that Google cannot compete in.

Not won’t. Can’t.

Privacy is Google’s Achilles' heel

Privacy is mutually exclusive with Google’s business model.

If they stop spying on people tomorrow, they would go bankrupt. Of course, that’s a silly scenario because they couldn’t stop spying on you even if they wanted to. As a publicly-traded corporation, Google would get sued by its shareholders if it even as much as thought too loudly about altering its core business model.

Since Google cannot compete in actual privacy, it tries to foster the illusion of privacy. One way to do this is to focus on security. Security is a related but very different thing to privacy, and is often used as a convenient misdirection.

Here’s an analogy: The mafia offer great security. If you’re under their protection, they will keep you safe and secure – perhaps even better than anyone else can. But the one group they will not keep you secure from is themselves. Similarly, Google has amazing security. If you’re their user, they will do everything in their power to keep you safe from everyone… except themselves. The price of enjoying Google’s security is your privacy.

Privacy is Apple’s absolute competitive advantage

Apple, on the other hand, can compete on privacy. Their core revenue stream is not tied to monetising data.

We know that Google cannot stop spying on you because they would go bankrupt if they tried. Their shareholders wouldn’t even let them attempt such a thing. But what about Apple?

Let’s say, for the sake of argument, that Apple is spying on you today. If it stopped tomorrow, in stark contrast to Google, Apple would still be the most successful consumer technology company in the world.

So riddle me this: if you have an absolute competitive advantage – if you have something that you can do that your competitors cannot – would you throw it away?

Only if you’re an idiot.

And something tells me Tim Cook isn’t an idiot.