Why Apple loves a tougher privacy regulation

On Wednesday, Apple's CEO, Tim Cook and Erin Egan, Facebook's privacy chief addressed separately about their desire of a tougher privacy regulation in the US, like what it is in Europe. Europe has the toughest privacy regulation at the moment; the EU's General Data Protection Regulation (GDPR) came into force in May and gives EU citizens the right to demand companies disclose and delete information held about them. Companies can be fined as much as 20 million euros, or 4 percent of annual revenues for breaking the law. Why does Apple want a similar privacy regulation in the US, given more regulations often mean higher costs for firms?

First, Apple wants a good image of itself. Privacy has become primary concern of many people, especially after the 2016 US presidential campaign. During the 2016 US presidential campaign, Cambridge Analytica collected approximately 87 million Facebook users without their consent and used it for political purposes. When people are so concerned about their privacy, Apple can certainly improve its company image by acting like a fighter. Secondly, Apple is not a company built based on its users' private data. Apple is selling services, such as Apple Music; but its major income source is its hardware. Therefore, complying with a tougher privacy regulation is not going to increase Apple's costs significantly, comparing with companies built on intensive data, for example, Google. Thirdly, Apple can use a tougher privacy regulation to reduce the likely competition facing it. It will work actually. GDPR adds more complexity to data asset management, which will increase the costs of managing data assets, especially when the companies have very intensive data. However, the costs for the companies which are less dependent of data will rise much more moderately.

Overall, a tougher privacy regulation in the US can actually benefit Apple.