Power

Google's new magic number for storing personal data: 18 months

After years of adding more tools and settings, Google's changing its default settings for how long it stores user data.

Google security logo

Eighteen months is Google's magic new number.

Image: Google / Protocol

After years of answering users' privacy worries mostly with more options and buttons most people will never find, Google made a big change to how it works by default.

Eighteen months is Google's magic new number: From now on, when someone sets up a Google account, by default their data will be set to autodelete after 18 months. The same goes for Google's Location History feature, which tracks users even when they're not using Google products. Google's not changing the policy for existing users, saying it doesn't want to change users' settings without their knowledge, but it does plan to remind them about their options. Anyone looking for a more stringent plan can set things to autodelete after three months instead.

Why those numbers? Google says that the three-month timeline is about recency: It's enough time to get context and have some relevant information about what you've been up to recently. The 18-month option is about seasonality, so people can find information about their taxes, get recommendations based on last year's TV shows, and the like. Both are designed to keep Google feeling personal and current, the company said, whereas a weeklong time frame might make that impossible.

Not all Google products get the same treatment, of course. YouTube data will now live for 36 months by default, since Google figures recommendation quality is particularly important there. Users can choose to delete after three or 18 months if they want. And there's no such setting for Gmail, Drive or Google Photos, which are explicitly designed to store things for a long time.

Google's also trying to make it easier for people to access their settings, like turning "Google Privacy Checkup" into a search term that takes you straight to that page in your account. It's making it easier to switch into Incognito Mode, too — though some users have found Incognito Mode to not be very incognito.

Sundar Pichai said in a blog post that Google continues to "challenge ourselves to do more with less," and Google executives talked a lot about the company's use of differential privacy to work with personalized data without identifying users. The company also proudly announced it's using differential privacy and federated learning to train the Gboard keyboard with more secure, less personal data.

But it's the defaults that really matter. Google said that 200 million people visit its account page every year, but even that is a small fraction of those with a Google account. Far fewer likely find the Data & Personalization tab, or know what to do with the checkboxes and checkups they find there. Google has collected many years of remarkably specific data on its billions of users, and has framed data collection as something like a necessary trade-off. "Data helps make search work better for you, and with autodelete, you can choose how long you want it to be saved," Pichai said at Google I/O in 2019. There was always a sliding scale between better products and better privacy. Now Google's indicating it's willing to work with much less, with no sacrifices.

The announcement was partly a sort of victory lap for Google, which has been touting its ability to store lots of data without compromising user privacy. It's also a clear signal to regulators, employees and others worried about Google's privacy. Pichai's blog post, which also talked about Google's policies with facial recognition, AI and video chat security, was the closest thing to a "don't be evil" manifesto the company has published in some time.

It's not likely to convince the employees petitioning Google to stop selling to police, or those worried about the company's power in the ad market or the role YouTube recommendations play in the spread of disinformation. But better defaults go a long way to helping users feel comfortable with the idea of Google products, especially as those users get more sophisticated about how their data is collected and used. And not for nothing, "we don't keep your data!" is a pretty good line for Pichai to use in the coming antitrust hearings.

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media China.com.

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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