Apple’s privacy stance is a huge ‘competitive advantage’ over Facebook and Google (AAPL)

pulse

March 21, 2018 7:12 PM

Apple's business model makes focusing on privacy easier than for Google and Facebook, a UBS analyst says.

He believes this gives the company a "competitive advantage" compared to other tech giants like Facebook and Google who have faced lots of criticism over how it protects users' data.

With all the hullabaloo surrounding Facebook's data breach scandal and Google's "right to be forgotten" directives, Apple can stand above the fray as the company that is in the best position to protect users' data.

Apple's business model focuses primarily on making money through its hardware, instead of on internet and software, which creates a heavy reliance on advertising for revenue. That makes it largely insulate the company from the European Union's strict privacy protection laws.

Google and Facebook, on the other hand, will likely feel more pain because of their heavy reliance on advertising to drive revenues, Milunovich says. The EU's General Data Protection Regulation (GDPR), which goes into effect on May 25, will restrict the kinds of data that companies can collect and requires consumers to opt-in to marketing campaigns, as well as give users more of a choice in what they would like to disclose. A Deutsche Bank analyst said the law could even wipe out as much as $2 billion from Google's revenues, for instance.

By contrast, Apple's privacy policy does not allow its users' data to be shared for marketing purposes, and it could turn out to be the company's biggest "competitive advantage," Milunovich says.

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