Privacy “Nutrition Labels”

Kenton Reynolds, Writer
@uxconnections

Apple is introducing a new safety feature that will ensure users know how their data is being collected and used.

The Market for Lemons

George Akerlof’s 1970 paper “The Market for Lemons: Quality Uncertainty and the Market Mechanism” introduced the problem of asymmetric information within the market. Exchanges commonly take place where one of the parties involved are disadvantaged as they are not as well informed as the other party. Akerlof puts forward the example of car dealers where the dealer knows whether the car they are selling is in good quality – a “peach” – or on the verge of breaking down – a “lemon”. As a result, consumers are likely to overpay for a “lemon” as they do not know what they are buying.

These types of markets can be found all over: private health care, insurance, car repairs and more. These markets often occur when expert advice/knowledge is involved, meaning the seller is well-versed in the market and therefore holds superior knowledge in comparison to the buyer.

A key example of a modern market that faces this problem is in apps where the user’s data is being collected. In this market, users often do not know the quantity of data that developers will collect as well as not knowing what the data will be used for. Though GDPR has gone some way to prevent this, any information about data collection and usage is still laced with heavy doses of jargon, complicated wording and technical terms which mean the user is still at the same disadvantage.

A nutrition label

Apple has introduced a new privacy feature to level out the playing field, however. All apps will be forced to provide a ‘nutrition label’ that details all usage of data in the app.

This comes as a delayed part of the IOS 14 launch which introduced a plethora of safety features including approximate location data, meaning apps will know the general direction you need to go in but will not know the specific building that you are in. Another new feature is the orange dot that will now appear in the upper right-hand corner whenever your camera or microphone are being used. These were released 16th September with IOS 14.

‘Nutrition labels’ will launch on December 8th and Apple is giving apps plenty of time to create the labels. Developers have been cautioned that they must disclose all information that the app or any 3rd party partners collect. They must also keep their ‘label’ up to date with any changes to the app.

How this affects the users

iPhones reach a huge audience, and their intuitive nature means that they appeal to all sorts of people who have a varying range of exposure to tech. As a result, many may not understand what it means when apps use their data and may not be able to spot their data being used. These ‘nutrition labels’ make privacy simple and clear for all users.

The ‘labels’ will be available on the App Store so you can check an app before you download it. If an app is going to track you, you will know before you download it. This means we can ensure that we don’t download any “lemons”, which will reduce any asymmetric information. As a result, downloads of “lemons” should fall drastically and therefore developers will be forced to create apps fairly and not exploit misinformation for extra financial gain.

Apple have brought in this privacy feature to create a fair market that protects users and now the App Store will ensure users can tell “peaches” from “lemons”.