Apple’s China dilemma: as the tech giant cracks down on privacy, Beijing finds a workaround
China’s tech companies have long lived in a parallel universe to their western rivals.
But the news that a number of them are testing a tool to bypass Apple’s new privacy rules raises a number of questions about the future of privacy – and perhaps the internet in general.
In short, app developers have long relied on data from Apple iPhones to ascertain their audience and their propensity to click on apps. Unsurprisingly, that’s of interest to digital marketers.
But Apple in the coming weeks will roll out a tool allowing users to opt out – indeed, they will have to opt in – to that level of tracking, largely to assuage regulator concerns.
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But Chinese firms – and the state-backed China Advertising Association – are developing a tool that could track Apple users even if they have opted out of Apple’s own tracking software, called CAID.
In addition to the worrisome involvement of a state-backed organisation, reports have emerged that foreign firms, and their Chinese divisions, have been approached about using the ‘workaround’ tracker.
What happens next may fundamentally impact the long-term development of privacy trends globally, and not just in China.
The first thing to point out is that, if the Chinese state is involved, it is hard to see how Apple will block this given such a move would be seen as a direct challenge to the authority of the state.
This simply would not be tolerated and it is important to note, in this context, that the lines between state bodies and the Government (which is another debate for another day) are much thinner in China than in the West.
Put simply, Apple cannot afford to lose China and, just as in other areas such as criticism regarding the manufacture of its iPhones, Apple will find a way to swallow these changes. In any confrontation, it would be Apple most likely to back down.
Secondly, this could be a very smart move by China strategically in its desire to have more influence over the digital ecosystem. If it is made clear to non-Chinese app developers who adopt the new system that they enjoy implicit protection from Apple barring them (which China could easily do), there is an inherent incentive to adopt the standards to continue to be able to track consumers.
As noted above, it looks like foreign advertisers are being encouraged to apply for the standards. Whilst in most cases, this will apply to their Chinese divisions only, there would be an obvious question as to how long such a wall would last in practice, regardless of laws in the west. It would also fit in with China’s longer-term strategy, which is to have more influence over the rules of how the internet is governed.
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Thirdly, in this scenario, the US (or other) Governments may decide it cannot stand by and allow such a situation to develop given the longer-term implications, thus putting pressure on Apple to adapt or even abandon its moves. One obvious lever of pressure is a closer scrutiny of the App Store and whether Apple is exploiting its position. Regardless of the levers, though, western Governments will be very wary of allowing any potential action that would allow China to have more influence over the setting of global Internet standards.
It remains to be seen what happens but one obvious beneficiary may be Facebook, which may have found its Get Out of Jail card from the radical downgrade to Apple’s existing tracking software.
If Apple applies different standards to China, it is likely to face a backlash, particularly in the United States. However, if it allows apps to be accessed by consumers globally that have different privacy standards, then it will also face a backlash. Either way, this move leaves Apple in an unenviable position.