The platform wars: Silicon Valley's Great Houses

January 30, 2019 (1875 words) :: Today in tech news: Apple fires a warning shot at Facebook for violating its app store policies. And the wheel keeps spinning.
Tags: game-of-thrones, big-tech, advertising

This post is day 30 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.

It’s been a hell of a day in news about big tech companies, with some wild shit going on among the Great Houses of Silicon Valley. Let’s retrace the steps. If you already know what happened, skip ahead to the analysis in the next section.

It starts yesterday, with TechCrunch reporter Josh Constine breaking a story about Facebook’s surveillance app:

Facebook first got into the data-sniffing business when it acquired Onavo for around $120 million in 2014. The VPN app helped users track and minimize their mobile data plan usage, but also gave Facebook deep analytics about what other apps they were using.

Over the years since, Onavo clued Facebook in to what apps to copy, features to build and flops to avoid.

For Facebook, the benefits of this kind of app are obvious. It’s a brilliant way to get data on consumers’ phone habits, providing access to priceless mobile behaviour data useful for acquiring companies or building products. It’s the sort of intelligence that, in a previous era, would have only been available to well-funded government agencies. The people who worked on it probably thought of it as really cool, because having access to data like that is pretty thrilling. Think of it this way: if you were a monarch, or dictator, you’d want to keep tabs on potential usurpers, and that’s basically what Facebook was doing.

But what were the benefit for consumers? Why, you might ask, would anyone voluntarily install this app? Ah, well, because it wasn’t advertised as “give all your data to Facebook so they can become infinitely powerful”. It was advertised to consumers as a way to keep your data safe/compressed when online (like a VPN).

Apple eventually caught on, and forced Facebook to pull the app. Which makes sense - Apple has built their brand around being concerned about consumer privacy, and here Facebook was decidedly contradicting that. But this is where it gets spicy:

despite Onavo Protect being banished by Apple, Facebook was paying users to sideload a similar VPN app under the Facebook Research moniker from outside of the App Store […] It has been referred to as Project Atlas since at least mid-2018, around when backlash to Onavo Protect magnified and Apple instituted its new rules that prohibited Onavo. […] Facebook didn’t want to stop collecting data on people’s phone usage and so the Research program continued, in disregard for Apple banning Onavo Protect.

Now, the “Facebook Research” app is even more sketchy than Onavo was. It was advertised to participants through Snapchat/Instagram ads, making use of intermediary companies to conceal Facebook’s involvement (to avoid suspicion, I suppose). Participants were paid $20/month to use it:

users download the app from and are told to install an Enterprise Developer Certificate and VPN and “Trust” Facebook with root access to the data their phone transmits. Apple requires that developers agree to only use this certificate system for distributing internal corporate apps to their own employees. Randomly recruiting testers and paying them a monthly fee appears to violate the spirit of that rule.

Let me reiterate. Apple created this feature intended only for use by corporations, for their employees (e.g., corporate phones). But the way Facebook used it was flagrantly abusing the rule, by designating people who were paid $20/month as “employees”. (This is especially brazen given that Facebook hires tons of contingent workers who aren’t given employee status; I wonder if the “employees” of Facebook Research got healthcare and benefits?)

Put another way: the world’s #6 top company by market cap was sneakily undermining the authority of the world’s #1 top company by market cap. And this had nothing to do with law or the government. What Facebook did might have been sketchy, but it was still legal - Nielsen boxes are legal, after all. The only laws broken were the ones unilaterally set and enforced by Apple. This was merely a fight among corporations, with one highly powerful behemoth violating the ToS of another one.

Constine’s TechCrunch article went out yesterday. Apple banned the app soon after, and also - raising the stakes - banned all of Facebook’s enterprise apps from the app store. Apple’s statement from the TechCrunch article:

We designed our Enterprise Developer Program solely for the internal distribution of apps within an organization […] Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple. Any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked, which is what we did in this case to protect our users and their data.

Let me clarify how huge this is. At a large tech company like Facebook, employees are given access to mobile apps for internal corporate services, from basic things like shuttle schedules and cafeteria menus to much more integral apps that directly affect research & development. So Apple revoking their enterprise certificate has the effect of a work stoppage, maybe not in terms of consciousness-raising but at least in the sense of workplace disruption.

Now, Apple could have gone farther - they could have actually done something about Facebook’s public-facing apps, which would have been catastrophic for Facebook. But that could have been a step too far, as it would have raised larger questions about Apple’s power to single-handedly harm other corporations. This move, while sending an effective warning message to Facebook, is much easier to justify, and it helps bolster Apple’s claim to being actually concerned with users’ privacy (unlike the other big tech companies).

So what are the long-term implications of all this?

My guess is that Apple will enable Facebook’s enterprise certificate soon. On the off-chance that this drags on the rest of the week, Facebook will probably have to rethink their internal app infrastructure to remove that possible point of failure. But Facebook ultimately does rely on Apple to distribute its consumer-facing apps, and Apple knows that. Facebook needs Apple more than the other way around. So they’ll probably end up making nice.

I don’t think this will harm Facebook that much in the long term - their stock actually just went up on the basis of their latest earnings call, and they will still have a ton of power even if their ability to track mobile usage in such a granular way is shut down.

What’s kind of funny is that it turns out Google was doing essentially the same thing. Not really surprising, if you look at the incentives. If one company in an industry is discovered to be doing something unethical but profitable, it shouldn’t be surprising when it turns out their competitors are doing the same thing. Especially if it has to do with data collection.

One of the big eye-openers I had with my own advertising technology startup is that if it’s possible to collect some sort of data, then it’s probably being collected and funneled toward to the entity best able to make use of it (i.e., monetise it). I learned that there was an entire industry was consisting of shuffling data in various legal shades of grey, often harvested under extremely sketchy circumstances, but everybody acted as if it was normal. When the Cambridge Analytica thing came out, lots of people in the industry were kind of like, “Yeah, and?”

What’s notable about all this is that there’s been no state involvement so far. It wasn’t a government body that discovered it - instead, the watchdog function was outsourced to tech journalists, who investigated on their own. Neither was the government responsible for the actual enforcement mechanism - that was executed by Apple, who reacted swiftly and punishingly. Instead of governmental oversight, we have different segments of capital policing each other. There’s no real law around this anyway - tech evolved too quickly for regulators to keep up.

In this case, Apple acted as both legislator and judge: they drafted the rules that determine what’s “legal” on their platform, and they are in charge of adjudicating whether someone has violated those rules. And given how integral Apple products have become in certain parts of the world, the way Apple choses to exercise that power could have dramatic impacts on people’s lives.

Where did Apple get this power? Who elected Tim Cook, that he should have so much control?

But this is the world platform capitalism has wrought. What we have here is essentially a consortium of privatised pseudo-governments, in miniature. They don’t quite meet the Weberian definition of the state, as these platforms don’t have recourse to physical violence. They can’t lock you up, and they can’t even freeze your assets (yet). But there is a form of violence just the same, in the control they have over the technology that mediates our lives.

The problem with such arrangements is that they’re chronically unstable. Like the Great Houses in Game of Thrones, each nexus of power is wary of the others, but in between the occasional bouts of outright hostility, they recognise the need for an uneasy alliance. They sue each other one day and then make a deal with each other the next.

Ultimately, though, they’re all playing the same game. Whatever differences they may have in “values” - like “consumer privacy”, or “connecting people”, or “organising the world’s information and making it accessible” etc etc - none of them are offering true emancipation. Not for their users, who are still disempowered either way, and certainly not for their workers, who have to deal with two-tier workforces and workplace discrimination and even more appalling conditions on the outskirts.

To recycle a famous quote from Game of Thrones:

Lannister, Targaryen, Baratheon, Stark, Tyrell – they’re all just spokes on a wheel. This one’s on top, then that one’s on top, and on and on it spins, crushing those on the ground. I’m not going to stop the wheel. I’m going to break the wheel.

The platform wars may be fought in the name of those on the bottom, but it’s hard to see how it benefits anyone other than those on top. Although the battles on top can be fun to watch, none of the combattants are worth rooting for; whoever emerges a victor from capital’s internecine antagonism is still representative of capital.

What would it mean to break the wheel? How can technological innovation be conducted without giving rise to huge corporations who take control of its development in order to mould it in their image? How could technology be developed and deployed without generating huge disparities in power, between those who build (and profit from) the products, and those who are merely users?

I don’t know. But anything’s gotta be better than the tech-fuelled dystopia we have now.

That’s it for today. Tomorrow will be a monthly recap, with summaries of previous posts as well as identifying themes that I want to write about more in the future. Thanks for tuning in, and thanks to Jason Prado for letting me steal his Game of Thrones analogy.

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