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Apple v Facebook feud escalates over iOS 14 ad privacy update

Mohit Oberoi
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Big Tech companies Apple and Facebook haven’t had the best of relations. However, what used to be veiled attacks has now turned into open warfare as Facebook issues full-page advertisements in US newspapers criticising Apple for the ad privacy rules in its iOS 14 operating system.

Earlier this week, Apple launched a new feature in its App Store that lists what data third-party apps collect on Apple devices. Now, it has launched a new feature called App Tracking Transparency, set to go live early next year. It will require apps such as Facebook to disclose that data they collect. A user would have to opt-in to enable apps to collect their data.

Apple defends new feature

Data privacy is a burning issue for individuals as well as governments globally. Concerned about the massive data that social media companies like Facebook collect, some users have shifted to alternatives such as MeWe that prides itself on not selling user data to the highest bidder.

Commenting on the updates, Apple said: “Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not.”

“App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice,” added Appl, insisting that it was “standing up” for its users.

Facebook lashes out against the new changes

As expected, Facebook, whose business model revolves around collecting user data to create targeted advertisements, has lashed out against the changes. “Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of creators and small businesses,” said Dan Levy, head of Facebook’s small business program.

This is not the first time that Apple has been criticised for monopolistic behaviour in its app store. Earlier this year, Fortnite creator Epic Games accused Apple and Alphabet of monopoly practices after its app was removed from their app stores for “violation of policies.” It also filed lawsuits against the two giants.

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Apple versus Facebook

Typically it has been smaller companies criticising Big Tech companies for supposed monopolistic business policies, such as the 30% revenue cut Apple charges on its app store, although it has announced plans to reduce this to 15% for smaller companies. This time, a Big Tech company is openly accusing a fellow giant of antitrust behaviour. For its part, Facebook appears to be using small businesses as a weapon to attack Apple, headlining its print ads “We’re standing up to Apple for small businesses everywhere.”

“While limiting how personalised ads can be used does impact larger companies like us, these changes will be devastating to small businesses,” said Facebook. It claims that adds that are not personally targeted generate 60% fewer sales than targeted ads.

To be sure, Apple-Facebook rivalry has a long history. Facebook’s CEO Mark Zuckerberg has criticised Apple in the past for its high smartphone prices and the fees that it charges for in-app purchases.

Apple too has been critical of Facebook in the past. “If they’re making money mainly by collecting gobs of personal data, I think you have a right to be worried,” Apple’s CEO Tim Cook said in 2014 about social media companies like Facebook.

Apple tries to protect user privacy

Meanwhile, Apple was anticipating pushback against its new updates. “It’s already clear that some companies are going to do everything they can to stop the App Tracking Transparency feature,” said Craig Federighi, Apple’s software chief last week. He added, “We need the world to see those arguments for what they are: a brazen attempt to maintain the privacy-invasive status quo.”

Facebook’s troubles mount

Meanwhile, this is the second major setback for Facebook this month. Earlier, the Federal Trade Commission (FTC) and a group of 48 state attorneys general filed two lawsuits accusing Facebook of being a monopoly and calling for its breakup. Facebook owns Instagram and WhatsApp, which the lawsuits says Facebook should be forced to sell.

The FTC and the states also accuse Facebook of creating a monopoly by thwarting competition. In their complaint, the attorney generals point to Facebook’s “buy-or-bury strategy that thwarts competition and harms both users and advertisers”.

Meanwhile, the lawsuits might not succeed given the fact that the FTC had cleared Facebook’s acquisition of WhatsApp and Instagram in the first place. However, Apple’s new updates strike at the very foundations of Facebook’s business, which revolves around targeted ads and harvesting massive amounts of data from users.

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Mohit Oberoi

Mohit Oberoi

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA in finance as a major. He has over 15 years of experience in financial markets. He has been writing extensively on global markets for the last eight years and has written over 7,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.