Big Tech Hopes to Combat COVID-19 Hindered by Privacy Hawks
Last week, Apple (AAPL) and Google announced a legitimate plan to get the American economy back to work.
The companies will use their smartphone market share to perform large-scale contact tracing to slow the spread of COVID-19. If enough iPhone and Android users download and use the app, it would be a game-changer.
With that said, there are major privacy concerns surrounding the idea.
Don’t get me wrong, I want it to work. Like most people, at this stage I would do almost anything to get out of the house. Unfortunately, most people don’t trust that big tech can be part of any solution.
According to a Morning Consult survey conducted in January, a majority of users believe online companies already have too much power over the economy. These same users were especially critical of the use of personal data to derive profits.
It’s not an accident. The idea that companies like Alphabet (GOOGL) and Facebook (FB) are digital predators is the product of a clever marketing campaign spun out of Apple’s Cupertino, Calif., corporate headquarters.
For the better part of two years, the iPhone maker has been conflating digital advertising with stolen privacy. Despite its questionable dalliances with authoritative governments in China and Russia, Apple executives have positioned the company as a champion on privacy.
The strategy worked.
Now, Apple managers legitimately want to help prevent the spread of COVID-19 with contact tracing. They are even willing to work with Google, a major competitor, to make it happen. Together, the companies effectively control all of market smartphone operating systems.
The technology works by using the Bluetooth sensors found in all modern smartphones. The software sends out low energy Bluetooth signals to other devices very nearby. When a connection is made (presumably by close contact), a key is created. The data is then encrypted and sent to Apple or Google servers. The main benefit here is that no personal information or location data is collected.
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The genius of the system is Apple and Google plan to offer APIs to be built into official apps from public health authorities. When a user tests positive for COVID-19, a message would be sent to every device holder with a common key.
In theory, it would be highly accurate contact tracing at scale.
It’s the exact strategy used in China and South Korea, which quickly curbed their COVID-19 outbreaks. This could be a huge reason why these nations currently have much lower COVID-19 cases. Contact tracing allowed authorities to quickly identify, test and quarantine infected persons. The difference is those systems were run by the government and they were involuntary.
The system being proposed by Apple and Google depends largely on people trusting that big tech companies have their best interests at heart. Apple managers have spent two years convincing consumers this isn’t the case.
Due to Apple’s past campaigns attempting to paint companies like Facebook and Google as privacy invaders, the Apple/Google alliance is likely not going to work.
There’s just too much bad blood between the two, and too much mistrust fostered among consumers.
That isn’t to say our hopes of battling COVID-19 are dashed. There are other ways we are fighting. These include using aggressive testing systems, like those developed by Henry Schein (HSIC), using proper protective gear and finding effective treatments. The ultimate goal is producing a vaccine. And while experts say we’re still months, if not over a year, away from that goal, there are still several companies hard at work trying to expedite that timeline.
It does mean, however, that hopes of using technology to get back to normal, as other countries have done, might not be plausible in the United States. Investors should keep that in mind when looking for opportunities.
Jon D. Markman