Victor Hill takes a look at how ‘big tech’ will be omnipresent, post-pandemic, in the fight to contain and suppress Covid-19 and future pathogens.
Test, track, trace
The ‘Big Five’ major tech companies will emerge even more dominant than before, once the Covid-19 pandemic has ended. By the end of this year, perhaps as much as half the world’s population will be carrying smartphones loaded with tracking apps designed to identify infection clusters, and thus to contain the spread of Covid-19. These will mostly be powered, manufactured, enhanced and supplied by the usual suspects− Google, Facebook, Apple, Amazon and Microsoft.
In early April, Apple and Google announced that they were partnering to create tools for contact-tracing apps that would be made available to third parties – such as the NHS and other health-care providers. The main issue is how the contact-tracing data is managed. While Google and Apple’s solution ensures that contact-tracing logs are anonymous and stored on the smartphones themselves, the version developed in the UK by the NHS stores that data on centralised servers.
Developers of centralised apps argue that they will have privacy protections to anonymise data. But the risk is that such data could be hacked. And the fear is that an authoritarian government could use this data for surveillance purposes. Apple limits the way in which apps can scan for Bluetooth keys in the background, to stop iPhone users being tracked, as the app can function in the background even when a phone is locked.
If privacy concerns deter even a minority of people from downloading these tracing apps, there will be a price to pay. Germany has chosen to go quietly with Google and Apple, while the NHS has decided to go it alone.
Australia’s health service and its Digital Transformation Agency have developed a contact-tracing app which draws on code from Singapore’s TraceTogether app and the data-hosting capabilities of Amazon Web Services. The East Asian ‘tigers’ of Singapore, South Korea and Taiwan were the first countries to start developing widespread tracing technology back in January this year when the pandemic was in its early phase. According to some reports, however, TraceTogether sometimes fails to record encounters between iPhones and smartphones running on Google’s Android operating system.
Rather than using a mobile phone’s GPS data, Australia’s system, like Singapore’s, uses Bluetooth. It launched on 26 April and more than one million Australians had downloaded it by the end of the first week. The UK’s NHS version only went live on 5 May in the Isle of Wight where it is still being trialled at the time of writing. In both Australia and Singapore, contact-tracing apps have to remain open in the foreground to work on iPhones. This makes phones more vulnerable.
Facebook (NASDAQ:FB): new frontiers in Asia
India is already Facebook’s largest market with 400m users. WhatsApp is also hugely popular, with over 200m Indian users. India is the second-largest online market in the world with over 500m internet users. But by 2023, Facebook expects to have over 900m users in India. Facebook will penetrate that huge subscriber base by having its portal pre-installed on cheap Jio smartphones.
Last month Facebook invested $5.7bn in Reliance Jio – the broadband and telecoms business owned by Mukesh Ambani, one of Asia’s richest men. Mr Ambani is planning to extend Jio’s internet services with a major new e-commerce project. By linking up millions of Indian convenience stores (known locally as kirana stores) he wants to compete with Amazon and Walmart (NYSE:WMT) (which owns India’s biggest domestic e-commerce portal, Flipkart).
It is quite possible that WhatsApp in India could evolve from a messaging service into an e-commerce and payments platform, emulating WeChat (developed by Tencent (HKG:0700)) in China. This is in line with Mark Zuckerberg’s strategy to diversify Facebook away from dependence on advertising revenue and to complement that with income from financial services.
Facebook is under growing pressure in Asia from Chinese social-media giants such as ByteDance, which owns TikTok− a video-sharing channel hugely popular with young people (almost) everywhere. ByteDance will be the subject of an IPO later this year. According to the company’s own website, ByteDance is likely to be valued at around $75bn. Apparently, ByteDance is hiring like crazy.
When the lockdowns kicked in across Europe and America, the word was that Facebook’s user numbers were up but advertising revenue was down. As I write, Facebook’s share price, at around $210, is very near to its all-time high. Early fears that advertising revenue had attenuated proved wrong: as the online shopping phenomenon expands, Facebook, as a global advertising portal, becomes even more pivotal − especially if it moves into health-care monitoring and tracing.
Apple (NASDAQ:AAPL): Gaining ground
The tech giant’s sales were inevitably impacted in Q1 2020 and prospectively in Q2. However, its products are now regarded as more essential than ever.
On 20 May, Apple and Google launched a new ‘high-octane’ software tool to allow governments to run decentralised contact-tracing apps via the Application Programming Interface (API). Twenty-two countries immediately requested access to the Apple-Google API.
Apple is also benefiting from the streaming boom. On 19 May, it was announced that the new Tom Hanks WWII movie, Greyhound, will be released on Apple TV Plus instead of via Sony Cinemas. That is because nobody knows when it will be safe for people to sit close together in cinemas once again.
Alphabet/Google (NASDAQ:GOOGL): rebounding
Google’s advertising revenue has been falling on account of the global lockdowns. Advertising revenue is especially depressed in the travel and retail sectors. That said, the company’s share price performed strongly in May after recovering from a dip in April.
Google is exploring the use of its technology to determine occupancy levels in A&E departments. In April, Google published reams of anonymised user-location data to show how visits to parks, railway stations and other places had declined during the various lockdowns. The company is currently working with the University of Southampton to quantify how effective the lockdowns have been in restraining the transmission of the virus.
Locked-down employees have had recourse to Microsoft’s software products in record numbers these last few months. Its Teams app – a rival to Zoom – has enjoyed a surge in use. Its cloud-computing service Azure is in record demand with the global surge of home working. Its gaming division is also doing well, with the new Xbox console expected later this year. Both Microsoft and Amazon are using their dominance in cloud computing to provide secure storage of data harvested by the NHS and other health-care providers.
Amazon’s share price is up 28 percent on the year – the company is one of the outstanding ‘winners’ of the coronavirus pandemic. Demand has been so high for its offerings that it has sought to hire another 100,000 staff worldwide. Analysts are expecting a huge increase in both revenues and profits. As I write, the company’s share price is still trading at an all-time high of around $2,454. Amazon’s Jeff Bezos, like Facebook’s Mark Zuckerberg has also invested in Indian e-commerce but so far without tangible success.
Last month China’s Alibaba (NYSE:BABA) announced plans to invest $29bn into cloud computing – that is certainly a challenge to Amazon. Amazon is reportedly in talks to buy US cinema chain AMC Theatres, which operates Odeon cinemas in the UK.
Fitbit, which has more than 30m active users, is planning to turn its fitness brands into social-distancing and coronavirus-symptom trackers. That could help the firm to close a proposed $2.1bn deal with Google. The wearable-technology brand has been working with Stanford University and Scripps Research Institute to collect user data which can track the spread of Covid-19. Its devices can measure resting heart rate and sleep patterns which change in perceptible ways when a person becomes unwell.
This data can be aggregated and transmitted to health authorities in a particular locality. They can then respond appropriately. The company has been working on a coronavirus ’tab’ on its app for users in the UK, the US and Australia. The tab shares the latest data about the pandemic and offers a subscription feature which allows users to connect with a doctor, virtually. Fitbit is also working on social-distancing and symptom-checking technology.
Fitbit’s proposed deal with Google would entail millions of users’ fitness data to be crunched by the AI pioneer. But so far this deal has been stymied by regulators in both the US and Europe.
The NHS approach in the UK: teething trouble
The key objection to medical tracking technology is that it is an invasion of privacy. The NHS contract tracing app which is still being trialled in the Isle of Wight as I write – where it has been downloaded by over 60,000 people − uses Bluetooth technology to log all the phones that one’s own smartphone has come near to. Users record details of their symptoms via the app voluntarily if they experience symptoms associated with Covid-19. They can then choose to share their proximity logs from the last 28 days with the NHS.
The NHS has developed an AI system which assesses which reported symptoms conform to infection by Covid-19. If it determines that there is a strong probability that a user has contracted the virus, it will advise that person to self-isolate and to be tested via the swab test now available at a number of drive-in centres. It will then send an alert to all the people that person came into close contact with. If the symptomatic person’s test result proves negative, it will then send a second alert to the contacts telling them that they no longer have to self-isolate.
In time, the centralised database will allow NHS operatives to identify clusters of infection and respond accordingly. The NHS is reportedly using a Silicon Valley AI and data analytics specialist, Palantir, to integrate its variegated data sets. Palantir, a private company financed partially by tech billionaire Peter Thiel, produces systems which US agencies use for surveillance operations. The NHS is also using AI systems supplied by British start-up Faculty to predict future demand for its services.
Some people in the UK regard this as a form of Chinese-style surveillance technology. In the first week of May more than 150 academics signed a letter warning that the UK risked becoming a surveillance state unless the technology was effectively regulated. A legal opinion from barristers at Matrix Chambers, Blackstone Chambers and data-rights agency AWO argued that the NHS contact tracing app would require “detailed justification” in order to satisfy human-rights law and that it “may be illegal”.
The National Cyber Security Centre (NCSC) explained that privacy-preserving gateways had been built into the system in order to stop individual users from being identified. It also stated that all app data would be held separately from other NHS patient data.
Some people on the Isle of Wight have complained that the NHS contact tracing app drains their phone battery and that it bombards them with multiple notifications. Apparently, the NHS contact tracing app doesn’t work on Android Version 7 or on any Apple iPhones manufactured before 2012. Despite the glitches, the app received a 4.5 out of five rating on Apple’s App Store.
It emerged on 8 May that NHS Digital (NHSX) had asked the Swiss company Zühkle Engineering, to explore the feasibility of using the Apple-Google method whereby the data remains on users’ phones and is not stored centrally. The contract was reportedly worth £3.9m. The NHS has had an unhappy history of IT disasters, so its credibility in this domain remains in question.
The UK is currently recruiting an 18,000-strong ‘army’ of contact-tracers. Of these, 15,000 will be call-centre workers and 3,000 will be medics. Some doubt whether those staffers will have been adequately trained in time for the proposed national launch in early June. Serco (LON:SRP) will be training the call-centre operatives in conjunction with Capita (LON:CPI).
MPs on the House of Commons Human Rights Committee have called for legislation to be enacted before the app is rolled out nationally, to ensure that mass surveillance cannot be carried out. Baroness Dido Harding, a former chief executive of TalkTalk, has been appointed chair of NHS Improvement and in that capacity will report directly to Cabinet Secretary Sir Mark Sedwill and Prime Minister Johnson.
Do tracing apps really work?
In all countries there is the issue that a minimum of approximately 60 percent of the population should download the app in order for it to become effective. Given that many people – particularly the elderly – do not possess smartphones, this means that in the UK 80 percent of smartphone users must enrol. Then there is the issue of interoperability – will the Australian app work in the UK and vice versa? And what if employers demand that the app is downloaded as a condition of employment? What if someone’s coughing is monitored through smart speakers? At what point does contact-tracing become intrusive?
The people of Northern Ireland may be required to download two contact-tracing apps if they wish to cross the border into the Republic of Ireland. The Republic has opted to work with Google and Apple to develop its own app. Commentators have warned, however, that Northern Ireland’s and the Republic of Ireland’s apps are likely to be incompatible and unable to communicate with each other.
Another problem is that contact-tracing apps which rely on Bluetooth connections could result in false alerts because those signals can transmit through walls and plasterboard partitions. So people who live in flats may receive notifications to self-isolate because one of their neighbours has experienced symptoms.
Bluetooth technology was developed in the 1990s by Swedish telecoms giant Ericsson (STO:ERIC). It uses radio waves to link mobile devices. These radio waves have a range of up to 10 metres – much more than the recommended two metres required for effective social distancing.
Some sceptics point out that smartphone apps only ever complement manual tracing. All the countries rolling out tracing apps are recruiting and training personnel to analyse data and to call people who are thought to have contracted the virus.
And even if the virus is eliminated in short order, as we hope – what happens thereafter? Will contact-tracing just continue as during the pandemic? We know that China is becoming a surveillance state, with cameras everywhere linked to facial-recognition technology. Citizens in a democracy will wish to balance their fear of surveillance against their fear of infection, though, for now, the latter is preponderant.
What are other countries doing?
In early May, France started to test a tracing system running on similar architecture to the NHS version, after both countries rejected Apple and Google’s off-the-shelf solution. The French Digital Economy minister said that centralised data is more efficient in tracing Covid-19 cases.
A pan-European initiative to develop a common framework called PEPP-PT has been abandoned by Switzerland and Spain, due to objections regarding where data were to be stored. Germany ditched its own attempt to build a centralised app after it was unable to get Bluetooth permissions from Apple. Germany is now building a decentralised version of Apple and Google’s model in collaboration with Italy. Thus far, Italy has been using a decentralised Bluetooth app called Immuni, using technology developed by Apple and Google. Any data collected is encrypted and is unusable by Italian health authorities.
Norway has developed its own Smittestopp app along the same lines as the UK and France. However, it uses satellite GPS data as well as Bluetooth signals to track users’ movements. Despite objections about privacy, it had been downloaded by more than a quarter of Norway’s population by mid-May. Iceland’s app, Rakning C-19 relies on GPS data only.
South Korea uses a mixture of GPS location data and credit/debit-card transactions to identify people who may have been infected. In the second week of May, Taiwan’s government offered to hand over the codes for its advanced tracing technology to the UK. Taiwan’s cyber experts have developed two voluntary tracing apps – one for border control and health checks which uses GPS and one for social distancing which uses Bluetooth. Home isolation of returning citizens is achieved by base-station triangulation, which uses location-tracking to ensure that quarantined people remain within 300 metres of their homes.
The system begins at the airport where arriving passengers fill out a form on their mobile phones and details are fed into a centralised tracing system. Each passenger is then assigned a social worker and a police officer. The social worker calls twice a day to make sure that the person is still in possession of their mobile phone. If the phone goes unanswered, the police show up. To ensure privacy, only the chief of the Central Epidemic Command Centre (CECC) has access to the names of the mobile phone users.
In Australia, the tracing app developed by the government struggled last month to record when iPhones came into contact – though it works with Android-powered phones. Analysts there say that any fix will be more battery-intensive than the Google-Apple approach and more likely to be accidentally disabled. Most Apple apps are only permitted access to an iPhone’s Bluetooth for specific functions. This means that countries can only use the Apple-Google system with their express permission.
In China, the state tapped into the ubiquitous mobile-phone apps Alipay and WeChat and awarded citizens risk ratings of green, yellow or red, which permitted them to cross checkpoints (or not). In Israel, tracing citizens’ movements has, controversially, been placed in the hands of the country’s intelligence agency, Mossad.
On 7 May, Columbia became the first South American country to abandon its efforts to develop a contact-tracing app locally after it was beset with technical problems − and it threw its lot in with the Apple-Google standard.
Homomorphic encryption? What’s that all about?
In Tel Aviv, data-science start-up Duality Technologies is one of a few firms worldwide commercialising a new technique called homomorphic encryption. This allows huge volumes of data to be analysed even though it is still encrypted. Duality was co-founded by the Israeli-American computer scientist Shafi Goldwasser who won the Turing Award in 2012 for her work in cryptography. Duality was valued at $43m during its last funding round in September of last year.
Homomorphic encryption allows companies to analyse data which has been anonymised and is ideal for analysing health-care data where strict secrecy needs to be maintained. For example, a homomorphically encrypted medical database stored in the cloud could allow users to enquire about the health condition of an employee. However, it would only accept an encrypted employee name and provide an encrypted answer. Some computer scientists think that this approach could be applied to the databases generated by tracking technology.
This technology is already being used in the fight against money-laundering. In July last year, a team including Lloyds, HSBC and Duality Technologies presented a homomorphic project named Simba at the Financial Conduct Authority’s anti-money laundering conference.
Action and conclusion
The novel coronavirus is likely to be with us for some time. But even if we can vanquish it, we will have to remain on guard for the next pandemic. The fact that most citizens of the modern world carry smartphones, equips humanity with a powerful tool to combat infection. Those smartphones are overwhelmingly powered by Google (Android) and Apple (iPhone).
At the time of writing, in the third week of May, the tech-heavy NASDAQ is actually up by six percent on the year – despite the prospect of a global recession, while the Russell 2000, which comprises of smaller US companies, is down by 20 percent. This reflects the fact that the pandemic has accelerated the trend for customers to switch from bricks-and-mortar retail to online shopping, representing a behavioural shift that is unlikely to be reversed.
Most tech giants are also sitting on huge cash piles. Moreover, because the tech giants’ share prices still have huge potential upside, they don’t have to reward investors with excessive dividends.
Once the impending recession takes hold, the disparity in share prices between the established tech players and aspiring start-ups could result in a wave of acquisitions which will give the Big Five access to even more cutting-edge technology. Listening to the background noise, I suspect that the UK will abandon the NHS Digital app soon (possibly even before this goes to press) in favour of an Apple-Google solution.
If these Big Five tech giants are so deeply embedded in our lives today, they should also constitute holdings in our portfolios.