Privacy as an Unfair Advantage: 3 Reasons to Pay Attention to the Recent iPhone Commercial

Only a lazy person did not repost the new iPhone ad released by Apple on September 3, 2020. The ad makes a big bold statement about privacy. Yet, many online discussions concentrate on the fact that in this ad Apple did not say anything new. Indeed, for many of us who are thinking about security, privacy and business models on a regular basis, it was obvious for quite some time that very soon a company's competitive advantage will be determined by its ability to protect consumer (as well as other) sensitive data. Businesses will also be soon judged by customers, partners and competitors based on how well they can design "privacy-preserving" solutions. So, why is this iPhone ad such a big deal? Well, it is significant for 3 main reasons.

Reason 1: Consumers Are Finally Ready to Talk about Privacy

Only last year people like myself, who were trying to engage managers, executives, and, in fact, anyone willing to listen at different business levels, and convince them to pay attention to human-related cyber risks highlighting the importance of privacy-preserving solutions were often given the usual response that: " while we are actively looking into this issue and certainly interested in addressing the privacy issues in the future, our customers are not yet ready to engage in conversations about privacy". Well, who would have thought that with COVID pressures putting much of the human activity and, if fact, human life online, that "rainbow" time horizon is now right at our door step? And the Apple commercial signals this very well - customers ARE ready. Well, let me take this back and correct this statement. A substantial segment of customer base in many businesses is ready to sit down, think and have a conversation about privacy. What this means is that those of us who thought that there will be "plenty of time" to think and address the issue of privacy before the "average" consumer starts questioning the issue and demanding some answers have effectively run out of time. The time is now.

Reason 2: Privacy Is Still a Vague Construct

The Apple commercial also highlights that privacy remains a highly problematic concept to work with. With some notable (yet, still, rather context-dependent) exceptions, what is private for one person, is perfectly "sharable" for the other. The way we think about privacy is defined by our culture, social relationships, individual/behavioral characteristics, and, most importantly, CONTEXT. Context is key. This is why even the smartest people on Earth struggle with defining privacy. If a random person comes up to you in the street asking for your personal information like name, address and phone number, you would definitely be reluctant to share it. Yet, in many shops people do provide this information to a shop assistant they see for the first time in their life and, most importantly, in the presence of other people they do not know who can easily overhear (and, if they want, record) this information.

Reason 3: Clever Play on the Privacy Paradox

Of course, Apple employs many clever people, who understand behavioral science very well and the behavioral science of privacy gives us very clear clues as to why people behave the way they do. Specifically, we all (no matter how naive or sophisticated we are) suffer from the privacy paradox. In behavioral science, the privacy paradox refers to the robust behavioral regularity which documents that people tend to raise concerns about privacy and say that privacy is very important to them when asked about it directly; yet, their willingness to disclose private information in exchange for digital services remains high. In other words, what we say and what we do about our privacy are two different misaligned things. The point I am trying to make here is that even though many people will like the new Apple commercial, very few will actually adjust their behavior to stop or decrease excessive sharing of personal information in exchange for services and goods. Theoretically, behavioral scientists explain the paradox by saying that even though before disclosing information people should consider both potential risk (associated with disclosure) as well as trust (how trustworthy is the entity to which they disclose information), in reality, they tend to base their decision almost entirely on trust. Naturally, this explanation seems problematic: just as we have not idea what "privacy" is, we are equally clueless about what "trust" is... So, "trustworthiness" is just as subjective as "privacy".

In place of a conclusion...

Despite its importance and significance for the future of digital business models and digital business model innovation, and despite the smart ways in which the privacy paradox is brought to light by the Apple's creative marketing team, the Apple commercial misses an important point. This point is about assumptions we make with regard to privacy. In a way, in business context (as well as in many other applications), we tend to either treat privacy as a binary variable (it is either there or not) or tend to think that people ALWAYS prefer more privacy to less. However, the subjective and context-dependent nature of the concept is such that how people treat their individual privacy in many ways depends on their individual vulnerability, or rather, their subjective perception of vulnerability to various privacy-related risks. For example, if a person does not believe that their personal information may be of significance to anyone present in the shop, this person will gladly and loudly provide house address, postal code and even phone number in the presence of others to a person they have just met (and, likely, will never see again). If a person believes that the benefit of a digital service (e.g., downloading the Facebook app to connect to friends and family) outweighs the cost of losing some personal data, Facebook app will appear on their smartphone. After all, who has the time to read all of those endless pages of Terms of Service when they stay in the way between you and your natural curiosity about whatever happened to those folks you studied with at high school?

In any case, in the next few years we will see the increase in privacy-preserving rhetoric in corporate communication. Will this rhetoric be used for the greater good (i.e., to genuinely protect the customers from making reckless decisions online) or just as means to achieve an "unfair" competitive advantage? The time will tell...

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