It began with Tim Cook being interviewed by Kara Swisher and Chris Hayes, following Apple's education event in Chicago.
Cook made that point again today: "The truth is, we could make a ton of money if we monetized our customer — if our customer was our product. We've elected not to do that."
Swisher posed a question for Cook: What would he do if he were Facebook CEO Mark Zuckerberg? His answer: "I wouldn't be in this situation."
Mark Zuckerberg responded during a podcast with Ezra Klein.
You know, I find that argument, that if you're not paying that somehow we can't care about you, to be extremely glib and not at all aligned with the truth. The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can't afford to pay. And therefore, as with a lot of media, having an advertising-supported model is the only rational model that can support building this service to reach people.
That doesn't mean that we're not primarily focused on serving people. I think probably to the dissatisfaction of our sales team here, I make all of our decisions based on what's going to matter to our community and focus much less on the advertising side of the business.
But if you want to build a service which is not just serving rich people, then you need to have something that people can afford. I thought Jeff Bezos had an excellent saying on this in one of his Kindle launches a number of years back. He said, "There are companies that work hard to charge you more, and there are companies that work hard to charge you less." And at Facebook, we are squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use.
I don't think at all that that means that we don't care about people. To the contrary, I think it's important that we don't all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you. Because that sounds ridiculous to me.
Then, during Zuckerberg's testimony before the U.S. Senate, photographer Andy Harnik managed to grab a shot of his notes.
From Associated Press:
Tim Cook on biz model
- Bezos: "Companies that work hard to charge you more and companies that work [hard to charge you] less."
- Ay FB, we try hard to charge you less. In fact, we're free.
- [On data, we're similar. When you install an app on your iPhone, you give it [access to] information, just like when you login to FB.
- Lots of stories about apps misusing Apple data, never seen Apple notify people.
- important you hold everyone to the same standard.
Where to begin?
No such thing as 'free-as-in-your-data'
Cook's comments, which came on the heels of an education event, are consistent with his and Apple's philosophies and policies going back years. Apple charges for hardware and some software and services, and uses that income to subsidize a much larger pool of software and services, including iOS, macOS, iWork, iLife, free apps on the App Store, the basic level of iCloud, iMessage, Apple News, and more.
When Cook says he wouldn't be in this situation, it's because he's chosen to work at, and continue to operate, a company whose business model allows it to have users that are also customers, and line up behind the privacy and security of those users-as-customers.
Zuckerberg's comments, which came in the midst of whatever the tech CEO equivalent of a celebrity contrition and redemption tour is, felt fresher and more raw. Almost angry. He goes as close as he possibly can to calling Tim Cook a liar without using that word. And it's ironic, given the utter lack of truth in Zuckerberg's comment.
Facebook isn't like Amazon. I won't delve into Amazon's sometimes predatory pricing strategies here, but in essence, it still charges you money for goods or services. Facebook charges you data and attention. And that's not charging anyone "less" at all — depending on your perspective, it's charging much, much more. It's charging something that not everyone may value but that is, in many ways, priceless.
Further, the implication that those who can't afford to pay in money should be grateful they can pay in data is insensitive at best, horrifying at worst.
In essence, Apple charges you for a meal. Facebook gives you a lobster dinner and then sits there, leering at you.
And that isn't "free". "Free-as-in-data-and-attention" isn't "free". Again, depending on your perspective, it's radically more expensive.
Fool me once
On the subject of user data, Apple and Apple developers have certainly made mistakes in the past. Location data, Path, Uber, and Facebook itself have all had incidents. Yet, in each case, Apple added protections, called CEOs to the carpet, and amped up the security of the platform. In other words, Apple worked hard not to make the same mistake repeatedly.
Facebook, on the other hand, has a history littered with incidents followed by apologies that ultimately led to very little change. That Zuckerberg is sitting before the U.S. Senate now shows how seriously he and Facebook have taken privacy up until now. Privacy theater would be a fair way to put it.
And people can tell. Over time, over incidents, the difference becomes apparent. It happened with Eric Schmidt at Google and it's happening with Mark Zuckerberg at Facebook: That subtle shift from when you think they're naive to when you realize they think you're gullible. From when you think they're not being candid to when you realize they think you're too dumb to know they're not being candid.
Data isn't a business model
The truth is, using data to provide services is completely separate from exploiting that data for advertising, marketing, or influence peddling. Using a stream of data for machine learning is completely separate from persisting and hoarding that data for other uses.
You can subsidize deeply personal services the way Facebook (or Google) does, absolutely. But you can also subsidize deeply personal services in other ways, including hardware profits, the way Apple does.
Zuckerberg's whataboutism notwithstanding, Apple and Tim Cook have been long on privacy for years. Even when it looked like people didn't care — that data in exchange for services was a great deal — Apple and Tim Cook believed that the sentiment would change. That it would have to.
What's happening with Facebook right now and the way Mark Zuckerberg is choosing to react to it sure makes it seem like they were right.
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