Apple’s Anti-Cookie Strategy Hurts Google, but It Also Hurts Consumers

Commentary about business and finance.
March 5 2012 1:11 PM

Me Want Cookies!

Apple’s pro-privacy, anti-cookie strategy for mobile Web browsing hurts Google, but it doesn’t help users.

iPhone with Google search.
Complaints about Google as a privacy-invader sometimes come across as a bit short-sighted

There is a new front in the titanic war between Google and Apple for control of the Internet: browser privacy. In February, Stanford graduate student Jonathan Mayer proved that Google had devised a clever means to “trick” Apple’s mobile Safari browser into allowing the installation of third-party cookies. That sounds—and is—shady, but iPhone users may feel better about it when they learn that third-party cookie installation is standard on the browsers you’ve been using on your computer for years. The option to turn them off has long existed, but this is one of these default settings that almost nobody uses in practice. The main use of third-party cookies is targeted advertising. If an ad network sees you searching for shoes on one site and then surfing over to read something else, the network remembers that you’re interested in shoes and will keep trying to sell them to you. What Apple did with Safari was flip the default—assuming that users did not want third-party cookies—either striking an underhanded blow at Google’s business model or securing a victory for privacy, depending on your perspective.

Once Google’s circumventions were exposed, it apologized and promised not to do it again. But while I don’t want to sanction underhanded tricks and am, personally, a heavy user of Apple’s gadgets, I’m far from certain that this campaign against third-party cookies is a positive development.

For starters, complaints about Google as a privacy-invader sometimes come across as a bit churlish and short-sighted, as if I were to announce with great fanfare my discovery that happy-hour specials are just another money-making plot from the bar industry. Google is not a charity, but it has built a remarkably successful company by giving products away for free. It’s a minor miracle that the best search engine, the best Web browser, the best email client, the best map software, and the world’s most popular mobile phone operating system are all made by the same company and available to the world free of charge. That’s not corporate beneficence: It’s the fruit of Google’s hunger for data, but it tastes sweet just the same.

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The broader picture, however, is that better-targeted ads produce economic benefits for consumers and advertisers alike. More efficient advertising creates incentives for firms to expend more resources on improving the real quality of their services. And more efficient advertising can create markets for content that otherwise might starve for lack of revenue. Suppose, for example, you want to start a journalism site to cover state government in Florida.

This is a big state that lacks a great newspaper. In principle, you could imagine attracting a healthy audience for compelling journalism about the Florida government. But what do you sell? The state is too geographically expansive for local firms to want to reach a statewide audience, and there’s not an obvious product that’s complementary with state politics. By the same token, nobody has a compelling desire to associate their brand with coverage of the simmering violence on the Sudan/South Sudan border or India’s successful campaign against polio.

In a world of user tracking, the precise nature of content is less important. The editorial job becomes to find an audience—any audience—and then the tracking will target ads for shoes or apps or kitchen gadgets or car insurance or whatever it is that the other information about the reader as an individual suggests he’s interested in.

Right now big advertisers are wasting an awful lot of money. Whenever I watch NFL games, I find myself watching a lot of ads for pickup trucks and car insurance even though I don’t own car, walk to work, and live in an apartment near a metro station in a major city. In a future of ubiquitous ad targeting, Ford and Geico will stop wasting marketing money on me. Some of those savings will get plowed into throwing even more ad dollars at the real audience for them. And some of those ad savings will allow Ford and Geico to offer cheaper products.

Cellphone network operators, similarly, are currently spending insane amounts of money on television advertising precisely because they have no real way of knowing which people are close to the end of their contracts and considering a switch. Better targeting would, it’s true, mean an annoying super-flurry of ads targeted at potential switchers. But it would also mean they wouldn’t waste their money—and our time—advertising to people who don’t need the product.

I’m certainly happy that Web browsers are able to respect the desires of those with strong contrary views on the subject, it’s a bit difficult to see what concrete benefits a person derives from privacy in this context. Tracking is a profitable strategy for advertisers if and only if they succeed in marketing things to you that you do in fact want to buy. If it works, you’re finding products you like and the sites you read are reaping more revenue. If it doesn’t work, then you’re no worse off than you were when exposed to scattershot advertising. People often invoke Minority Report’s dystopian vision of ubiquitous personalized advertising in this context, but it’s the ubiquity, not the personalization, that looked so annoying. Having random loudspeakers shout customized pitches at you while you walk through the mall would be horrible, but decustomizing the sales pitches doesn’t fix the problem.

The ultimate tell here, I think, is precisely that almost nobody ever switches the defaults one way or another. By exploiting that fact to establish advertiser-hostile settings, Apple is striking a blow at a corporate rival by adding a privacy feature that’s widely available yet rarely used on other browsers. If the privacy benefits as such were the big draw, we’d expect to see more evidence of users opting-in to these settings. Certainly Apple has the right to do what it wants with its proprietary browser, but this particular call is a step backwards for the broader public interest. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.