Privacy change for Gmail data has big impact on startups

Google’s move to cut developers off from scanning people’s Gmail for ad targeting might go unnoticed by most users — but it could upend a whole segment of apps, highlighting the outsized power and influence Google wields as a gatekeeper of data.

Last week, Google announced new privacy restrictions that included limiting how developers can use Gmail data. Google said in its updated policy that third-party apps could only collect information in ways that improve email functionality, such as drawing information from email receipts to help customers track trip itineraries or find discounts for online shopping. But companies can no longer use that same data to target ads or generate market research. gent data restrictions in the

That could imperil the wake of its Cambridge Anabusiness models of some lytica scandal. The company popular email extensions, announced in April it would like Unroll.me or Earny. limit the data developers Under the new rules, Unroll. could collect from events me, which unsubscribes cus- and groups on the platform. tomers from emails, will no Three years earlier, Face- longer be able to share infor- book made major changes mation it gleans from its to its own developer tools customers’ inboxes with a amid privacy concerns that market research company hampered academics, other it works with. Earny, an businesses and political camapp that scans email shop- paigns. ping receipts for refunds on “We need to find the right purchases, will be barred balance, giving people con- from sharing and selling its trol over data sharing and customers’ data to an email preventing abuse without marketing firm. hampering people’s expe-

Google’s clampdown will riences or hindering innoprovide customers with more vation,” Facebook Direc- data security, experts say. tor of Product Management But some policy experts and David Baser said in a recent startup investors worry the blog post. pendulum may have swung Google’s tightening of its too far, and the data restricdata sharing policies might tions could stifle innovation appear politically savvy after and actually result in more the company received inqui- power for tech titans such ries earlier this year from as Google. Senators John Thune, Roger

“In the process of lock- Wicker and Jerry Moran on ing down the data that you third party email app develstore with them, the big platforms would be locking in their control of that data and their unilateral ability to leverage it,” said Kevin Bankston, director of New America’s Open Technology Institute, a technology-focused arm of the think tank.

Google declined to comment. The company previously announced it would partner with Microsoft, Twitter and Facebook to create tools that would give customers the ability to transfer their data across different services.

Facebook, the o ther keeper of vast amounts of data on billions of people, has also adopted more strin- opers’ use of Gmail data, according to a letter. The inquiries came after the Wall Street Journal reported on app developers’ email scan- ning practices.

But the restrictions may only tighten Google’s already immense grip on data about its users, which it uses to bolster its ad business that generates billions in reve- nue. The customer data is also crucial to its research and development efforts in fields like artificial intel- ligence.

Customers have enjoyed a wide range of free services for years in exchange for their data. But in exchange for the growth of many new technology services, they’ve often given up some of their privacy.

“The right balance requires policies that give users meaningful control and protection but that also foster competition and innovation,” said Terrell McSweeny, a former federal trade commissioner. scanned email to assist with banned by Google’s new poltrip planning or track prices icy. (The company said at the online. Many of the busitime it was “heartbroken” to nesses were viable because learn its users were upset in they sold data they obtained an apology blog post that is from inboxes to support ad no longer available.) targeting or market research. Earny shares data it col

Google itself stopped read- lects with marketing firm ing customers’ emails for Return Path, according to advertising purposes in 2017, Earny’s privacy policy. Earny in a move that was seen to declined to comment, and bolster its corporate email Return Path didn’t respond business. Google was not to a request for comment. mining corporate email for “These companies that advertising uses, but the sell data just got blown up,” company’s data collection said Streak Chief Executive practices had hindered its Aleem Mawani, who makes ability to sell to corporaan add-on for Gmail that tions in the past. helps businesses manage

Google’s announcement leads. this week that it would limit Streak generates reveGmail scanning was tucked nue through business subinto a revelation that it had scriptions and does not sell discovered a bug that poten- data, Mawani said. He said he tially exposed the personal hopes Google’s new rules will data of hundreds of thouprovide more transparency sands of users of its unpop- around how email extensions ular social network, Goowork and make his service gle+, prompting the broader more trustworthy. crackdown on data sharing. Even Gmail developers Previously, the large techStartup investors say the that don’t rely on selling data nology companies encour- companies’ restrictions are could be impacted by Gooaged developers to access a significant shift for Siligle’s changes. data through their plat- con Valley, where for the In addition to new restricforms. Google aimed for past decade, many promi- tions on how customer data its popular email service nent companies like gaming can be used, Google will Gmail to be a foundation company Zynga have relied implement a more strinthat other developers can on the larger platforms to gent app review process, build upon, creating ser- jumpstart their growth and which will include a security vices that would keep cusattract more users. check that will cost between tomers engaged and returnUnroll.me, the email exten$15,000 and $75,000 or ing to its service. sion, is “still in the informa- more.

“You become the sun tion gathering stage” on GooFor smaller startups, the which all these planets gle’s new policy, a spokes- new security assessment fees revolve around,” said Venky woman said. Its scanning of could prevent them from Ganesan, managing direc- Gmail drew criticism last year ever launching, he said. tor of Uber-investor Menlo when The New York Times Mawani said Streak is profVentures. exposed Uber was using the itable and can absorb the

Investors funneled checks service to glean data from costs of the review, but the into startups built on email, Lyft customers’ receipts. cost will likely be the same and large companies like Transferring receipt data as several months of an engiSAP’s Concur and Capital to marketing firms such as neer’s salary. “That does hurt One acquired businesses that Slice Intelligence would be a little bit,” Mawani said.

DAVID PAUL MORRIS / BLOOMBERG Google’s clampdown will provide customers with more data security, experts say. But some policy experts and startup investors worry the pendulum may have swung too far, and the data restrictions could stifle innovation and actually result in more power for tech titans such as Google.