Facebook shares fall when Zuckerberg calls out to Apple

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Problems are brewing

Apple

and

Facebook.

In the conference call next Wednesday

Facebook

(ticker: FB) reported earnings, took over CEO Mark Zuckerberg

Apple

(AAPL) to the task, saying that Apple’s upcoming changes to ad-tracking technology are in its best interest and not to help people, as Apple claims.

“Apple may say they are doing this to help people, but the steps clearly follow their competitive interests,” CEO Mark Zuckerberg said in the earnings call late Wednesday. “And I think this dynamic is important for people to understand because we and others will be dealing with this in the near future.”

The upcoming change Zuckerberg refers to is a mysterious part of Apple’s iOS mobile software that helps companies selling ads keep track of what people are doing on their phones. The tracking technology is used by Facebook – and many other ad-based companies – to target ads more effectively to increase their value.

In December, Apple CEO Tim Cook said Apple believes people should have a choice about what data is collected about them and how it is used. He made the point in one tweet that Facebook can still follow people, but permission will have to be requested soon.

It’s not clear when Apple plans to launch the update, but Facebook has long pointed out that if Apple continues with its plans, it will do the most damage to small and medium-sized businesses. Those types of businesses need accurate targeting technology to serve ads to their customers, rather than buying a state-specific or zip code-specific ad. Large companies can afford to make large ad purchases, Facebook executives said.

But Facebook appears to be brooding about going well beyond strongly worded earnings call statements.

Lawyers hired by Facebook are preparing an antitrust case against the iPhone maker, according to a report in The Information Thursday. The lawsuit reportedly states that Apple’s rules for the App Store are unfair. In order to place an app in the Apple Store, developers such as Facebook must adhere to a number of rules, such as using their payment system.

Zuckerberg also included a specific issue with Apple’s App Store practices in the earnings call. “I want to emphasize that we are increasingly seeing Apple as one of our biggest competitors,” said Zuckerberg. “IMessage is an important weapon of their ecosystem. It comes pre-installed on every iPhone and they preceded it with private APIs and permissions. That’s why iMessage is the most used messaging service in the US. An API, or application programming interface, allows developers to integrate their apps with popular software platforms.

It was not immediately clear whether Facebook intended to proceed with the lawsuit against Apple.

Epic filed a similar lawsuit against Apple last year amid a publicity problem and row after the company tried to implement its own payment system within its popular Fortnite videogame. Epic has asked courts to force Apple to change its business model for its app store.

Despite the problems Facebook has with Apple, technology analyst Colin Sebastian of Baird wrote in a note to customers on Thursday that Facebook is one of the strongest and most innovative large-scale internet platforms. He wrote that there remains upside for its core businesses, calling the quarter “strong,” while noting that growth may slow during the year.

Facebook shares closed on Thursday with a 2.6% drop to $ 265.