Americans' conception of privacy itself, as much as a deadlocked Congress, stands in the way of the U.S. adopting a national digital privacy law, experts tell Axios' Margaret Harding McGill.

The big picture: U.S. citizens, uniquely among global populations, think of privacy as the right to decide who enters their space.

Zoom out: American individualism historically emphasizes personal choice and freedom, especially freedom from government intrusion into personal space.

• The Bill of Rights specifically includes protections barring the government from stationing soldiers in private homes without the owners' consent.
• "We have trouble in this country thinking of privacy as something other than the preservation of individual sovereignty over one's immediate personal space," Emily Tucker, the executive director at the Center on Privacy and Technology at Georgetown Law, told Axios.

Yes, but: In today's data-driven, always online society, that focus on individual choice and consent has given many tech firms a green light to assemble vast stockpiles of citizens' personal information. That data fuels enormously profitable targeted-ad businesses that underwrite free service for the customer.

• "I do think that Big Tech companies have flagrantly exploited this American bias that privacy is about my personal space and my personal choice," Tucker told Axios.
• This led to the current regime, under which people "consent" to data collection by clicking an "I accept" box on terms of service they never read.
• "It's been really difficult for people to come around to the realization that privacy is actually not possible at all if it's organized around personal choice .... It has to involve a set of agreements among members of a community about shared practices," Tucker said.

State of play: This summer, bipartisan lawmakers in both houses of Congress agreed on a comprehensive privacy bill requiring companies to minimize the personal information they collect, but it still faces obstacles to becoming law.

The intrigue: Beyond American individualist traditions, several other factors stand in the way of federal privacy legislation.

• A big one is cost, with both lawmakers and the companies reluctant to pile new compliance costs for U.S. firms that have become drivers of the economy, said Ashley Johnson, a senior policy analyst at the Information Technology and Innovation Foundation.
• "The fact that we are a leader in this space is obviously very good for our country in many ways, but it has made regulation more difficult," Johnson told Axios.

Flashback: A decade ago, the Obama administration unveiled a "privacy bill of rights" and tried to devised a legislative strategy on privacy that "died on the vine," said David Vladeck, a Georgetown professor and former FTC official.

• "There wasn't really any appetite to regulate, and the reasons were economic — this was the most dynamic part of our economy," Vladeck told Axios. "We were basically conquering the world in the sense that our platforms were dominating. And so at least initially, Congress was just worried about killing the golden goose."
• Now, there's more of a consensus on the need for a law, but less agreement on what it should do.

Also: Privacy is a slow-burn issue that's easy for Congress to sideline in the face of crises like the pandemic, the war in Ukraine, gun violence or inflation.

The bottom line: The American public simply isn't demanding a privacy law, Susan Ariel Aaronson, director of the Digital Trade and Data Governance Hub at George Washington University, said.

• "I do think there's this huge contradiction between what people say they want and what they actually want," Aaronson told Axios. "They want free more than they want privacy."

Apple is beginning to build its own ad empire just as its iPhone privacy crackdown weakens key ad-supported rivals, Axios' Sara Fischer and Scott Rosenberg report.

The big picture: In the middle of a broader downturn in the online ad market, Apple’s move to limit the way apps track user behavior kneecapped competitors like Meta, even as users embraced it.

Why it matters: Apple has long touted a privacy and security advantage for its products over alternatives like Google's Android and Microsoft's Windows. But the simultaneous rollout of Apple's ad expansion and privacy changes that limit other companies has stoked criticism and could draw the attention of antitrust regulators.

Driving the news: Apple is planning to expand its advertising business significantly by placing more ads directly on users' devices, Bloomberg reports. 

• The expansion would include bringing ads to more of Apple's own apps on iPhones and iPads, including Apple Maps. 

By the numbers: Last quarter, Apple said it made $19.6 billion from services like advertising, the App Store, Apple Music, iCloud, Apple News, Apple TV+ and Apple Pay — representing nearly 25% of its quarterly revenue.

• In the same quarter five years ago, services represented just 13% of Apple’s overall revenue.
• Apple doesn't break out how much of its services revenue comes from advertising, but a Bloomberg report suggests the company currently brings in around $4 billion annually in ad revenue.
• Analysts estimate that Apple's ad business could reach $6 billion by 2025. For comparison, Snapchat had $4.1 billion in ad revenue last year, and Twitter had $4.5 billion.

Catch up quick: Apple's ad business began to boom following changes it made last year to its app tracking policies that made it easier for iPhone users to opt out of being tracked across other apps on their phones.

• For companies that rely heavily on that user data, the changes made it much harder to efficiently target people with ads online.

Meta has waged a huge lobbying campaign against Apple’s changes, arguing they make it harder for small businesses to find customers. 

• Meta executives said they would lose $10 billion in ad revenue this year because of Apple's changes. 

Be smart: Apple's biggest source of ad revenue is search advertising. Data from analytics firm Branch shows that Apple's privacy changes have significantly shifted ads that promote app downloads from companies like Meta and Snapchat to Apple. 

What's next: So far, regulators have yet to pay much attention to this fight.

Israel's NSO Group, which specializes in allowing nation states to gain access to iPhones, is replacing its CEO. The company is also laying off 100 people, leaving it with about 700 workers remaining, a source tells Axios.

Details: NSO Group said Sunday that CEO Shalev Hulio will step down, with current COO Yaron Shohat overseeing the company and its restructuring process.

Between the lines: Israel has been pushing the U.S. to take NSO Group off a Commerce Department blacklist. The department said NSO's Pegasus spyware was being used by repressive governments around the world to target activists, journalists and political opponents.

• The company said it will "examine all aspects of its business, including streamlining its operations to ensure NSO remains one of the world's leading high-tech cyber intelligence companies, focusing on NATO-member countries."

Flashback: In June it was reported that NSO Group was in talks to sell itself to U.S. defense firm L3Harris, although by July the talks were said to have ended.

On Tap

• Zoom reports earnings after the markets close.

Trading Places

• Discord has hired Snap's Peter Sellis as senior vice president of product.

ICYMI

• Amazon is said to be among the bidders ready to spend as much as $8 billion to acquire home health giant Signify Health. (Wall Street Journal)
• Twitter has reportedly tested a feature that adds a "verified phone number" label to users' profiles. (The Verge)
• House Oversight Committee leaders sent letters to executives of eight social media platforms demanding information about online threats to law enforcement. (Washington Post)

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