They are the feuding offspring of Steve Jobs. They quarrel bitterly about the world he left behind when he died in 2011. In more peaceful times Steve would mentor Mark, then in his twenties, on long walks through the apricot groves of Silicon Valley. At the same time he was handing Tim, then aged 50, the keys to the technological kingdom.
Now Mark Zuckerberg, the co-founder and CEO of Facebook, is worth almost $130bn. Tim Cook is CEO of Apple and is worth only $1.3bn but he is currently winning the feud and Apple’s future looks more secure than Facebook’s. Apple is valued by the market at $2.3trn, Facebook a mere $998bn.
Both men are stupendously successful but they are, philosophically and psychologically, utterly opposed. Zuckerberg is an idealist, he imagines what should be; Cook is a pragmatist, he sees only what is. The world Zuckerberg imagines is one in which total connectivity will expose our common humanity and bring people together in peace. The world Cook sees is the one we have – a world divided by the bullying, lies and rancour caused by ever greater connectivity but which, with luck, can be improved by technology.
At stake is the future of the internet, how it is run and, crucially, how it makes money. In the early 2000s, tech share prices collapsed in what came to be known as the dotcom crash. Everybody was excited about the internet, but it had suddenly become clear that nobody knew how to pay for it. The answer, embraced by Facebook and almost everybody else apart from Apple, was advertising. We were to pay for our surfing by being subjected to a deluge of online ads.
This started a new tech boom, one in which we are still living. But it was also the beginning of an unprecedented invasion of privacy. The value of online ads was sustained by an ever more intrusive trawl of our private online lives. The more you knew about people, the more precisely you could target your advertising, and the more valuable those ads became. This trawl included detailed information about our internet browsing – land on one site and you would be tracked as you landed on others.
In 1998, when he first joined Apple, Cook made it clear that he cared about privacy. He has told staff it is “one of the top issues of the century”. He regards it as a human right and a civil liberty. Ever since he has consistently made it clear that Apple will not engage in info-trawls of its users’ private lives.
In an interview in 2014 he hardened his position – “I think everyone has to ask, how do companies make their money? Follow the money. And if they’re making money mainly by collecting gobs of personal data, I think you have a right to be worried. And you should really understand what’s happening to that data.” He also issued a now commonplace warning: “When an online service is free, you’re not the customer. You’re the product.”
Soon afterwards, Zuckerberg snapped back in an interview in Time magazine: “A frustration I have is that a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers. I think it’s the most ridiculous concept. What, you think because you’re paying Apple that you’re somehow in alignment with them? If you were in alignment with them, then they’d make their products a lot cheaper!”
Further enraged by Cook’s comments, in 2018 Zuckerberg ordered all employees on his management team to stop using Apple iPhones and switch to Android devices. He has since argued that Apple has “a unique stranglehold as a gatekeeper on what gets on phones”.
The odd thing about this feud is that, on the face of it, these two companies should not be fighting – indeed, Cook doesn’t regard Facebook as a competitor, since “we are not in the social networking business”. But, increasingly, they have trespassed on each other’s territory. The iPhone carries digital services like the iMessage chat system which competes with Facebook’s WhatsApp. And Facebook has moved into hardware with products such as the video-calling device Portal.
This diversification beyond the core business is now happening across Silicon Valley. Amazon started out as a shop but, thanks to the huge success of Amazon Web Services, it is also now a world leader in cloud computing, a much more profitable business than retail. Google was once a search engine, but with Alphabet, its holding company, it now has YouTube, driverless car maker Waymo and British AI company DeepMind.
But the Tim-Mark feud is not just about branching out. The real issue is the conflict between the ad-driven model of Facebook and Apple’s control over the dissemination of these ads.
This year the long cold war between the two companies has turned hot. Cook decided to do more than talk the talk. He introduced a feature called App Tracking Transparency (ATT) onto Apple’s latest operating system for its mobile devices – iPhones and iPads. ATT allows users to stop cross-site tracking. A similar feature was already on the Safari browser on its computers.
This innovation was foreshadowed by remarks made by Jobs in 2010. He felt the answer to the privacy question was to give users the choice: “I believe people are smart, and some people want to share more data than other people do. Ask them. Ask them every time. Make them tell you to stop asking them if they get tired of you asking them. Let them know precisely what you’re going to do with their data.”
“It is not,” said Cook of ATT, echoing his master, “aimed at a company. It’s aimed at a principle. And the principle is that the individual should be in control over whether they’re tracked or not, who has their data. It’s that simple.”
But he also said, “We can no longer turn a blind eye to a theory of technology that says all engagement is good engagement.” That could only mean Facebook. “Engagement is always good” was Zuckerberg’s core justification for social networks.
ATT was rolled out from late April 2021, and the first signs were ominous for Facebook. Flurry Analytics found that in the first few weeks of operation 85 per cent of users worldwide clicked the do not track button when asked. In America the figure was 94 per cent. This will have an immediate effect on advertising earnings.
Nevertheless, Cook pronounced himself “shocked that there’s been a pushback to this degree”. The main source was Zuckerberg, who saw it as a direct assault on Facebook’s entire business plan.
Facebook has some powerful anti-Apple arguments. For example, it can say that Cook is being hypocritical. In its Chinese operations Apple had been forced to allow the government to have access to its users’ data. This is a reasonable criticism, but few companies have proved themselves so pure that they leave or refuse to get into China on these grounds. Facebook is blocked in China, but sells billions of dollars of ad space to Chinese advertisers every year. Google withdrew a censored version of its search engine from China in 2010, but later that decade secretly began developing another censored search engine for the Chinese market, which it abandoned when the story was leaked and employees rebelled.
There is greater credibility in the claim that ATT damages small businesses more than big ones – Facebook ad customers are largely small operations, including the “mom and pop” stores of American myth-ology. “Without personalised ads,” said a Facebook statement on ATT, “Facebook data shows that the average small business advertiser stands to see a cut of 60 per cent in their sales for every dollar they spend.”
In addition, Apple uses Google as its default iPhone search. Google tracks activity as much as or more than Facebook. So why is Google a friend and Facebook an enemy? Finally, destroying the advertising model will force internet users to pay for the services they have come to regard as free by right.
This last point is crucial and goes far beyond the mutual loathing of Zuckerberg and Cook. The beauty of the advertising model is that it conceals the cost of internet services. Users certainly pay – both with their attention, by being deluged with ads, and with their wallets, by buying what is advertised (and thus funding the ads). But they pay nothing to join Facebook.
Customers pay an awful lot for Apple’s premium devices, and more for access to its cloud, TV and music services. But the deal is open-handed, visible and calculable.
All these issues are overshadowed by Facebook’s recent history. The extent of its data-trawling and its vulnerability to abuse was brutally exposed by the Cambridge Analytica scandal in 2018, when it was revealed the consultancy had harvested the data of millions of Facebook users to help it create targeted political advertisements for Donald Trump’s 2016 election campaign. Facebook received a $5bn fine from the US Federal Trade Commission. It also became clear that Russia had used Facebook to try to manipulate American elections. These events wiped $100bn off Facebook’s market capitalisation.
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A new book has exposed the full extent of Facebook’s management failure at this point in time. An Ugly Truth: Inside Facebook’s Battle for Domination by Sheera Frenkel and Cecilia Kang is a detailed dismantling of what happened at the highest levels of the company as it pursued a policy of deny, deflect and obfuscate. Zuckerberg’s idealism had become a catastrophic obsession with growth at the expense of credibility, truth, political wisdom and simple decency. The book is a testament to his managerial naivety in comparison to Cook’s caution and deep experience.
When asked what he thought about Facebook’s travails, Cook coolly responded, “I wouldn’t be in this situation.” Zuckerberg seethed, saying Cook was being “extremely glib” and that his remarks were “not at all aligned with the truth”. In private, he had reportedly told his people that they needed to “inflict pain” on Apple.
This went to absurd lengths, beginning in 2017 when Facebook expanded its contact with Definers Public Affairs, a distinctly creepy right-wing outfit that, among other things, devised strategies to make people and companies look bad. One of its schemes was to float the idea that Tim Cook could be a presidential candidate in 2020. This seemed to be an attempt to wreck Cook’s careful handling of the Trump administration. Countless anti-Apple articles were also placed. After all this came out in the New York Times, Facebook sacked the company.
Throughout the conflict, there has been a presentation problem for Facebook. The average punter could imagine talking to Cook: he looks like a stern but approachable businessman of a familiar kind. But they would be tongue-tied if they met Zuckerberg. With his robotic features, his bland expression and tightly cropped hair, he looks like a visitor from another world.
The conclusion most people drew was that he was, indeed, a robot and that he was guilty as charged of all the offences laid against his company. For Kara Swisher – who, as a tech writer on the New York Times, talks to Zuckerberg regularly – this is a misunderstanding. She says he is “one of the least cynical people I know in Silicon Valley”. She goes on to suggest there is an essential purity about the man.
“Anyone who has spent a small amount of time with Mr Zuckerberg knows that he’s uncomfortable with his immense power; he agonises deeply about his every step. In my innumerable conversations with him over many years – often late at night over a phone, giving them the feel of a college-dorm jaw session – he maintained that he trusted Facebook’s larger community to clean out the vile, often-toxic dreck that flowed over his ever-larger platform. Mr Zuckerberg believes in the perfectibility of man.”
That last line is either thrilling or chilling, depending on your knowledge of history – the more knowledge, the more chilling. But Zuckerberg “never seems to be motivated by base instinct”, says Swisher. Call me a sucker, but I can see some truth in this. Zuckerberg may just be clinging on to his idea that connecting people is inherently good, despite the world being full of bad actors. This is faith, not reason, and having a faith is not in itself bad.
Though it can be. The career of Zuckerberg – the brilliant coder who dropped out of Harvard and formed a giant social media company – is a kind of student dream based, as it is, on the idea that you are smarter than your teachers. So dangerously seductive is this that Scott Galloway, professor of marketing at the Stern Business School in New York, has taken to advising his students, “Assume you are not Mark Zuckerberg” – clearly some of them were likely to make that unwise leap of faith. On Twitter Galloway has said Zuckerberg has, “Perverted our elections, depressed American teens and made discourse more coarse.”
Cook is a harder nut to crack. Zuckerberg’s career path – Harvard-Facebook – sealed him off from wider experience; Cook is marinated in the real world. Born in 1960 and raised by working-class parents in Robertsdale, Alabama, he studied industrial engineering and business administration. He worked in computers, rising to a vice-presidency at Compaq. He lasted six months. Steve Jobs made him an offer and against his better judgement – “I listened to my intuition, not the left side of my brain” – he accepted.
He took over as CEO of Apple in 2011, six weeks before Jobs died. Everybody was sceptical – here was a mere business thinker taking over from the greatest, most dazzling artist of tech – but Cook was breathtakingly successful, mainly by not trying to be Jobs. Fixing all the boring details of diplomacy, people management and business strategy, he made Apple into the most valuable company in the world. Its capitalisation is now greater than the GDP of Spain.
You don’t achieve this by being either a great artist or a Harvard dropout idealist. But you can do it by being a moralist, which is exactly what Cook seems to be. He is gay – not easy in 1970s Alabama – and he has a lively sense of the rights of minorities.
He slapped down big shareholders who complained about Apple’s profitless drive to make its technology available to the blind and the disabled, and he told others to “get out of the stock” if they didn’t agree with the company’s view of climate change (last year he promised that Apple would be 100 per cent carbon-neutral by 2030). In a Washington Post op-ed of 2015 he also attacked “religious freedom” bills in Indiana and Arkansas that could be used to discriminate against LGBT people: “These bills rationalise injustice,” he wrote.
There is also a clear note of moralism in his attacks on Facebook. He believes society is in a “privacy crisis” and that people are being tricked into giving up information which is sold on to advertisers. Advertising-supported social networks are, therefore, a dishonest sell.
Illustration: Anthony Gerace
Zuckerberg has had to descend from the high platform of his own idealism to engage with these claims. He does so most effectively when he points to Apple’s control of the environment in which it operates. The iPhone is not, as it may seem, a neutral gateway to the world. Apple controls what you can and can’t do by managing the available apps – this is the “stranglehold” described by Zuckerberg. “Apple,” he has said, “has every incentive to use their dominant platform position to interfere with how our apps and other apps work.”
This stranglehold combined with Cook’s attacks has, it has been reported, inspired Facebook to prepare an antitrust suit against Apple. “As we have said repeatedly,” the Facebook spokeswoman Ashley Zandy told reporters in January, “we believe Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses.” Epic Games, the creator of Fortnite, is suing Apple, claiming that its App Store – which takes a 30 per cent revenue cut – is run as a monopoly.
The word “antitrust” signals the presence of two very big elephants in this room, bigger even than Cook and Zuckerberg. Antitrust legislation has been out of favour for decades, perhaps because of the delusion that it is an anti-free market and anti-capitalist idea. In fact, as the break-up of Standard Oil in 1911 and of AT&T in 1982 showed, the destruction of monopolies is essential to the sustenance of free markets. Now, with the apparently unstoppable rise of the Big Tech companies, there are signs that antitrust is coming back into fashion. Apple and Facebook are both potential targets. The cases could be built on showing consumer harm due to anti-competitive practices – Apple’s “stranglehold” and Facebook’s habit of buying up and neutralising potential competitors such as WhatsApp and Instagram.
The antitrust elephant has recently grown even larger with Joe Biden’s appointment of Lina Khan as chairman of the Federal Trade Commission. She is young (32) and seriously concerned about the growth of monopolies, especially in Silicon Valley. In 2017, with one article in the Yale Law Journal entitled “Amazon’s Antitrust Paradox”, she changed the business climate, putting antitrust break-ups at the centre of political thinking.
The second elephant may not yet be in the room but it certainly should be. This is Section 230 of the Communications Decency Act passed by Congress in 1996. The act stipulated that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” If I libel you in a newspaper you can sue me and the paper but, thanks to the act, if I libel you on Facebook you can sue me but not Facebook. If this act had not been passed there would be no Facebook – at least not in anything like its present form.
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The act is irrational because it allows social media companies to say they are not publishers. They obviously are – they publish posts to millions of people and preserve them more or less forever. It also gives social network companies an unfair advantage over all other media.
The argument now is whether they are responsible for their content. Thanks to scandals such as Cambridge Analytica and election tampering, most people think that social networks, like traditional publishers, should be. This is an existential threat to Facebook, if not Apple. Unsurprisingly therefore, Cook has said, “I think it’s time to revisit 230. But I don’t have an answer of what the perfect way to revise 230 would be.”
This, like Afghanistan, is beginning to look like a “forever war”.
We cannot look into the souls of these two men. Is Zuckerberg a genuine, if naive, idealist or a greedy and aggressive rich kid? Is Cook’s moralising entirely honest or is it a cold-blooded corporate tool to use against competitors? I don’t know and perhaps, after being so long embedded in their respective cultures, they don’t know either.
But the answers to those questions don’t matter. Cook and Zuckerberg, like the rest of us, are just passing through. What matters is the world they leave behind. Will it be one imprisoned or liberated by technology? That is the one question they should be asking in the apricot groves of Silicon Valley.
Bryan Appleyard writes for the Sunday Times
This article appears in the 14 Jul 2021 issue of the New Statesman, Apple vs Facebook