Case Study:

Data privacy

Apple is working on a new privacy feature for iOS 14 called App Tracking Transparency [ATT]. The feature will go live to everyone with the release of iOS 14.5 in 2021 spring. The new feature from Apple will block apps and websites from collecting and sharing an identifier called IDFA (The Identifier for Advertisers). This will prevent Facebook from using something called "view-through conversions" to get a complete picture of an ad's effectiveness.

If a person sees an advertisement on Facebook but does not immediately take an action, that does not mean the advertisement was completely ineffective. That same person may do a web search for that product later and buy it. Before Apples update, when a person makes a purchase on a retail website or app, that retailer can share the IDFA with Facebook. Facebook can then check to see whether that same IDFA saw an advertisement for that product on Facebook or Instagram and show the effectiveness of its advertisements. But with Apple's update, Facebook will never know that, and neither will its advertisers.

If Facebook cannot track conversions outside of its app, advertisers have no idea how valuable its ads really are. They are left guessing, and some might not like the uncertainty compared to other digital advertising platforms that can more easily track conversions without input from other apps -- for example, Amazon.

Facebook says its Audience Network, which displays advertisements in third-party apps, will get hit hardest by the changes. It warned that developers using Facebook Audience Network could see revenue decline 50% after Apple announced the new feature. The Audience Network only accounts for a small percentage of Facebook's ad business.

Facebook is not the only company that Apple could hurt with the update. Most digital advertising companies will face the same effect on their ability to measure advertising effectiveness on iOS.

1. Explain and illustrate the following concepts in stakeholder theory: (i) broader view of corporate responsibility and (ii) stakeholder(s). (7%). Will users of social media apps or platforms be freer than before Apples update? Explain your answer(s) clearly (8%)
2. Will Apples update make a morally better world? Explain your answer(s) clearly by elaborating and applying the Formula of Humanity (FH) and rule-utilitarianism respectively. (25%)