Facebook’s feud with Apple comes to a head over a dispute over Apple’s new privacy feature that would limit the reach of targeted ads and highlight the contrasting yet symbiotic nature of the two tech giants’ business models.
Apple plans to release a feature early next year that will require apps sold in store to ask users for permission to track their data, extending enhanced privacy features already launched. The update has been championed by technical advocacy groups such as Ranking Digital Rights, who cite it as an essential step towards data protection and transparency.
But Facebook, which thrives on selling targeted ads, is criticizing the update with an ad campaign that labels Apple’s action as being for profit, not privacy.
“It will force businesses to move to subscriptions and other in-app payments for revenue, which means Apple will benefit and many free services will have to start charging or exit the market,” said Dan Levy, vice president of Facebook ads and business products. blog post Wednesday.
Apple has pushed back and doubled down on Facebook’s claims that the move aims to improve privacy, while also pricking Facebook’s collection of user data.
“We believe this is a simple matter of standing up for our users. Users need to know when their data is being collected and shared with other apps and websites – and they should be able to choose whether or not to allow it, ”Apple said in a statement. “App tracking transparency in iOS 14 doesn’t require Facebook to change its approach to user tracking and targeted ad creation, it just requires them to give users a choice.”
Facebook stepped up its fight against Apple this week, coming out Wednesday with a new website and newspaper ads claiming that Apple’s update will hurt small businesses. Separate ads launched Thursday claim the move will also harm consumers, leading companies to charge fees for previously free services to make up for lost ad revenue.
“Obviously, Facebook is doing this in its best interest,” Elizabeth Renieris, senior policy analyst at Ranking Digital Rights, told The Hill, noting that the platforms’ clients are not individuals, but rather advertisers.
“They use the hashtag ‘Stand up for Small’ or something similar, but you don’t see the Small Business Administration or NFIB [National Federation of Independent Business] or the Chamber of Commerce that opposes these changes. That feels insincere, ”she added.
The Small Business Administration, NFIB and the US Chamber of Commerce did not respond to comment.
Levy acknowledged that the update will hurt Facebook’s diversified ad business, but wrote in the blog post that the effect on Facebook will be “far less than what will happen to small businesses.”
Speaking with reporters, Levy also accused Apple of being anti-competitive with the update in an attempt to take advantage of Apple’s app store.
The accusation comes because both Facebook and Apple, along with Google and Amazon, have faced more criticism of market power.
Earlier this month, 48 attorneys general filed a lawsuit accusing Facebook of anti-competitive takeovers. Facebook defended itself, noting that the acquisitions in question, of WhatsApp and Instagram, had been approved by regulators at the time.
While Facebook and Apple are two of the largest technology companies, they have contrasting business models at the heart of their explosive feud.
Facebook is built on providing free online services to users and instead makes money through ads on its platforms. Apple is based on consumer charging and is less dependent on ad revenue.
Despite their conflicting models, both companies rely on each other to reach consumers.
“The problem there for Facebook, it [has] kind of this weird symbiotic relationship [with Apple], ”Ryan O’Leary, senior research analyst at the International Data Corporation (IDC), told The Hill.
Facebook needs Apple’s iOS platforms to reach users, he said. Likewise, Apple runs the risk of losing users if it doesn’t have apps from Facebook available to customers.
The update, announced as part of a new set of privacy features revealed in June, was set to launch in September as part of the iOS14 update. But Apple later delayed the update, saying it would give developers time to update their systems and data practices.
The battle for the anti-tracking feature adds to a longstanding dispute between the best technology companies.
In 2018, Apple CEO Tim Cook condemned Facebook over its data privacy practices amid reports that Cambridge Analytica had collected data from 50 million Facebook users without their consent.
Used to be asked what he would do if he were CEO of Facebook Mark Zuckerberg
Mark Elliot Zuckerberg Hillicon Valley: Lawmakers Call for Action After ‘Devastating’ Cyber Attack on Federal Government | US Cyber Agency Issues Emergency Directive After Hacks | FTC Opens Privacy Investigation Into Major Internet Platforms Facebook Faces Serious Threat To Date Separated By Lawsuits 46 States And FTC Files Antitrust Cases Against Facebook MORECook replied, “I wouldn’t be in this situation.”
“We could make a lot of money if we monetized our customers. If our customers were our product, ”Cook said in the same interview with Recode and MSNBC.
“We care about the user experience. And we are not entering your personal life. I think it is an invasion of privacy, ”he added.
Zuckerberg fired back in an interview shortly after Cook’s, defending Facebook’s model as creating a more accessible Internet service.
“You know, I think that argument, that if you don’t pay for that, we somehow can’t care about you, extremely articulate. And not at all in line with the truth, ”Zuckerberg told Vox.
“The reality here is that if you want to build a service that connects everyone in the world, there are a lot of people who can’t afford it. And therefore, as with many media outlets, having an ad-supported model is the only rational model that can support building this service to reach people, ”he added.
The battle goes beyond the top executives trading barbs.
Apple turned down at least five versions of a Facebook Gaming app between February and June, The New York Times reported. Apple reportedly cited a rule banning apps with the “main purpose” of distributing casual games.
Now Facebook said it is also willing to lend a hand to another company taking on Apple: Epic Games. The company behind the hugely popular video game Fortnite filed a lawsuit against Apple this summer, accusing Apple of violating antitrust laws by requiring developers to use Apple’s payment system
Steve Satterfield, Facebook’s director of privacy and public policy, said on Wednesday that the social media giant is willing to back Epic Games’ lawsuit against Apple and provide all relevant information in the process.
The contentious relationship between Facebook and Apple is likely to be further highlighted in the coming months as lawmakers in the US and Europe crack down on tech companies. The regulations have taken a long time in many ways, O’Leary said.
“Consumers only understood too far in the situation that they were the products. The cat was a bit out of the bag and difficult to claw back, ”he said.
The European Commission unveiled sweeping new content and competition rules on Tuesday. The proposed Digital Markets Act targets so-called “gatekeepers,” and companies that fail to comply with the new rules could face heavy fines or be forced to sell parts of their businesses.
However, by flattening attacks on each other, Facebook and Apple are showing their market power as gatekeepers, Renieris said.
“They have this very public fight and are basically perpetuating themselves this way [that] subjects them to some pretty serious regulations, ”she said.