Day: 14 June 2022

The Money Powering the Servant Economy Is Drying Up ⇥ ft.com

Sarah O’Connor, Financial Times:

For some critics, the growth of this new “servant economy” is a symptom of resurgent economic inequality and an underclass without better options. But there is another factor that has powered its rise: investors have been subsidising consumers by funding companies that often charge less for these services than it costs to provide them.

Now that model is in jeopardy. The big problem is that the money is drying up. A decade of cheap money has given way to high inflation, gloomy growth forecasts and higher interest rates. Investors are beginning to get nervous about piling money into lossmaking companies. Shares in listed companies such as Uber, Lyft and Deliveroo have dropped sharply.

These companies have sustained losses far longer and greater than any boring delivery or taxicab business could. In their yawning crater of disruption lays the careers of taxi drivers.

If a business cannot survive without limitless infusions of investor cash and low-interest loans, is it really a business? Is it competing fairly?

CMA Report on Mobile Ecosystems ⇥ theplatformlaw.blog

Dimitrios Katsifis, writing in the Platform Law Blog, published by a British–Belgian law firm:

On 10 June 2022, the UK Competition and Markets Authority (CMA) published its Final Report on its year-long market study into mobile ecosystems — namely mobile operating systems, app stores, and web browsers. The CMA found that Apple and Google have a tight grip over these increasingly crucial ecosystems, which in turn places them in a very powerful position. As a result, thousands of businesses which rely on these ecosystems to reach their users face restrictions and terms which they have little choice but to accept, while consumers are likely to miss out on new innovations, have less choice, and ultimately face higher prices. In response, the CMA has identified a wide range of potential interventions that could help unlock competition and protect millions of businesses and people.

Even so, ecosystem operators — and Apple in particular — have fiercely opposed any intervention on the part of the CMA, arguing that this would compromise user privacy, security, and safety. […]

Of course there are times when real privacy and security risks conflict with permissive on-platform competition. But the CMA identified several areas where it says Apple and Google overstated those concerns in defence of their platform rules choices. That is a bit of a case of the boy crying “wolf!”. It is difficult to believe platform operators are always making these decisions only in the name of privacy and security when there are conflicts of interest in their own business lines.

Ideally, platform owners should be making decisions about what to allow in their ecosystem because regulators should not be micromanaging.

One other thing; Katsifis:

First, the choice architecture for the ATT prompt — which Apple chose without conducting any user testing — may not maximise user comprehension and thus could unduly influence some users to opt out of data sharing. Among others, the framing of the prompt could result in limited user comprehension, while Apple bars developers from offering any incentives for users to opt in to sharing their data (which in principle is not unlawful under UK privacy legislation).

Permitting tracking and data collection by coercion seems ethically fraught to me. How hard is it to not be creepy? At this point, just wipe the entire digital advertising and data broker industry off the face of the Earth and start from scratch.

Google Says It Bans Gun Ads, but It Will Still Place Them on Websites and in Apps ⇥ propublica.org

Craig Silverman and Ruth Talbot, ProPublica:

For roughly two decades, Google has boasted that it doesn’t accept gun ads, a reflection of its values and culture. But a ProPublica analysis shows that before and after mass shootings in May at a New York grocery store and a Texas elementary school, millions of ads from the some of the nation’s largest firearms makers flowed through Google’s ad systems and onto websites and apps — in some cases without the site or app owners’ knowledge and in violation of their policies.

[…]

In reality, Google has two sets of rules for weapons ads. One is for Google Ads, the ads that run on the company’s own ad network and on properties it owns, such as YouTube or Google.com search results. The other is for ads sold by partners, such as ad exchanges, that place ads using Google’s systems. Ad exchanges enable digital ads to be bought and sold via an automated bidding process. For these partners, Google operates as an “exchange of exchanges” — in which it facilitates the buying and selling of ads on other exchanges — and takes a cut of each ad transaction. Partner exchanges are guided by a set of more permissive rules that allow gun ads to flow through Google’s ad systems.

This looks like way for Google to maintain an arms-length distance from the lucrative markets it nominally claims are too dirty to do business with. I opened a private browser window, went to one of the survivalist websites listed in this article, and it took me exactly one attempt to see an ad for a folding semi-automatic rifle served by Google’s DoubleClick and hosted on a Google server.

Apparent Conflicts of Interest in App Tracking Transparency Rules Targeted by German Antitrust Probe ⇥ techcrunch.com

Natasha Lomas, TechCrunch:

A major privacy feature Apple launched last year, called App Tracking Transparency (ATT) — which requires third-party apps to request permission from iOS users to track their digital activity for ad targeting — is facing another antitrust probe in Europe: Germany’s Federal Cartel Office (FCO) has just announced it’s investigating the framework over concerns that Apple could be breaching competition rules by self-preferencing or creating unfair barriers for other companies.

Last year, France’s antitrust regulator declined to preemptively block Apple from implementing ATT — but said it would be watching how Apple operates in the feature. Poland also opened a probe of the feature at the end of last year.

Germany’s Federal Cartel Office, or Bundeskartellamt, published a version of its press release (PDF) in English.

Shoshana Wodinsky, Gizmodo:

The Bundeskartellamt’s investigation is primarily focused on Apple’s App Tracking Transparency Framework (or ATT, for short). For those unfamiliar, ATT is the set of rules that Apple rolled out as part of iOS 14 that require third-party app developers to ask for permission to track the users that download their apps — and when those users say no, ATT is what shuts off these apps’ access to a slew of valuable user data. You might recognize it from the small window that pops up and asks you whether you want to give an app access to your personal information, and you can respond with “Ask app not to track” or “Allow.”

It appears German authorities are not taking issue with App Tracking Transparency in a general sense but, rather, the conditions Apple has set for whether an app must request permission to track users. Apple says developers must get consent for apps that “[collect] data about end users and [share] it with other companies for purposes of tracking across apps and web sites”. Apple does the former, but it is everything after the “and” it does not do — and German regulators are investigating whether that gives it an advantage.

On its face, this investigation seems ridiculous. The App Tracking Transparency framework is merely intervening in third party apps to confirm whether the user is okay with being tracked in plain language. That sounds fine with me. The digital advertising industry is built on data collected illegitimately, with little consent, and with virtually no regulations. It is long past time for those behaviours to be reeled in.

Apple, as platform owner, gets access to a whole lot more ad targeting information than most individual apps, and because it is all first-party information not shared with anyone else, Apple does not need to ask permission for its ad network to use it. This appears okay: users have agreed to a business relationship with Apple, so of course it gets to use information it knows about users to target ads, and none of this is going to anyone else, so it is not creepy.

However, this advantage is difficult to replicate by any individual app or service. Only other gigantic companies, like Amazon and Facebook, can draw upon a trove of first-party data for ad targeting purposes. I have been arguing for the past year how it looks really bad for Apple to be setting privacy rules on its platform that restrict third-party advertisers while running its own ad network.

The solution here is not to empower others to more easily track users. If Apple is found to be illegally self-preferencing, I would hope it is resolved by allowing the continued operation of App Tracking Transparency while requiring Apple to reduce its first-party advantage.

This gives me a good reason to share my favourite Norm Macdonald joke (contains NSFW language, if that is a concern).