Thasos Response to Apple Terms of Service Change

0

In response to Apple changing its Terms of Service, geolocation data provider Thasos Group decided to make the difficult decision to completely eliminate the use of iOS data in their service.  The result has been a significant decrease in compliance concerns from hedge funds who value geolocation data.

Apple’s TOS Change

In late 2016 or early 2017 Apple changed its App Store Terms of Service for App Developers to better address the growing concerns of individuals about the privacy of their data collected by iPhone apps.  In the wake of these changes, Apple has slowly started to remove third-party apps from their App Store for violating the new terms.

The most concerning changes for the alternative data industry are found in Section 5.1 of the App Store Review Guidelines.  These changes can be summarized as follows:

  1. App developers must obtain consent from users to collect their data. In addition, users must be informed how and where their data is being used.
  2. Data collected for one purpose may not be repurposed without additional user consent.
  3. Data collected by apps sold through Apple’s App Store may only be used for two reasons, to improve the app or to support the serving of advertising.

In addition to simply asking users to provide their permission to collect data, Apple has required iOS app developers to explain what the data is used for and how it is shared.  In addition, Apple has started cracking down on instances where the data is used for purposes unrelated to improving the user experience.

Thasos Response

Due to these changes, Thasos had a difficult decision to make.  They could continue to use iOS data and risk losing it over time as their providers were forced to stop providing it.  Conversely, Thasos could stop using iOS data, forcing them to deal with the bias issues that would arise once they could no longer include Apple iPhone users in their panel.

Ultimately, Thasos decided to take the high road and eliminate all iOS data sources, thereby relying solely on data collected from Samsung and Google devices.  As a result of this move, Thasos chose to directly address the compliance concerns that many hedge fund clients had about the use of geolocation data.  Consequently, during the 1st Qtr of 2017, Thasos made the switch by dropping iOS data from their panel.

Key Issues Addressed

The first step Thasos took once eliminating all iOS data was to conduct a data analysis, comparing their panel against various third-party demographic datasets including granular census income data.  What Thasos discovered was that the household income of their new panel was slightly lower than what US census data would suggest due to the lack of Apple iPhone users.

Fortunately, their analysis also revealed that the bias was consistent across their dataset, enabling them to comfortably adjust for it.  Once they accomplished this, the team at Thasos conducted rigorous testing to ascertain whether this new dataset remained as accurate as it had been prior to the change in their panel.  Ultimately, Thasos became comfortable that their new panel had remained extremely predictive.

Thasos also discovered that the changes they made to their panel enabled many hedge fund compliance departments to get comfortable with Thasos’ approach.  In fact, a few external law firms started referring hedge fund clients to Thasos due, in large part, to the changes the firm made to its data sourcing policy.

Our Take

Over the past few years, geolocation data has become an increasingly important input to the investment research and analysis of consumer oriented companies conducted by sell-side and buy-side analysts.  However, a number of developments including Facebook’s Cambridge Analytica privacy scandal,  Apple’s change in its TOS, and news of covert geolocation data collection by 24 iOS applications have prompted a number of asset managers to see the use of geolocation data as being highly risky.

These compliance concerns have clearly become a source of friction in the sales process for many suppliers of geolocation data.  However, Thasos Group decided to address some of these concerns by eliminating all data collected by iOS apps from its panel.  While this was a risky move, now Thasos advertises that it collects “consumer approved, anonymized, and aggregated geolocation data collected from over 5 billion mobile phones worldwide”.

We suspect that geolocation data vendors like Thasos are going to be forced by the marketplace to increase their data compliance investments, and they will need to proactively market these efforts in order to raise the comfort level of buy-side clients and potential prospects.  In fact, we would not be surprised if a few geolocation data firms don’t decide to make data compliance a key strength of their offering, forcing their competition to keep pace with their investments in this area.

 

Share.

About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

Leave A Reply