The Beef Between Apple And Facebook, Explained

Apple and Facebook, two of the biggest names in Big Tech, don’t really like one another. Usually when big monopolies feud, like Coca-Cola and Pepsi or Wendy’s and KFC, it’s because they’re direct competitors. Not so for Facebook and Apple, the former making its lion’s share of profits from advertising, and the latter from device sales and App Store hustles.

No, this feud comes down to philosophy and control. 

What’s gone down recently to spark flames between Apple and Facebook?

This summer, Apple announced that it would give people more control over their data with the new iOS14 update that’s been released this fall by introducing a feature called App Tracking Transparency. The new feature would require developers to ask users if they want to opt-in to sharing data with developers, like Facebook, that usually collect unique device identifying information (IDFA) from iPhones in order to create targeted, personalized ads, which is Facebook’s bread and butter. 

Facebook immediately criticized Apple for this change, accusing the iGiant of hurting small businesses. And indeed smaller developers did complain about needing more time to adjust to an ad world without such unfettered access to users’ personal information. Last week, Apple announced that it would postpone the changes until next year to accommodate developers. 

Smack talk ensues

Last week, Apple’s Jane Horvath wrote an open letter to pro-civil rights groups defending the delay in which she took a swipe at Zuckerberg and Facebook for collecting as much user data as possible. 

“This disregard for user privacy continues to expand,” wrote Horvath. 

“We developed [App Tracking Transparency] for a single reason: because we share your concerns about users being tracked without their consent and the bundling and reselling of data by advertising networks and data brokers.”

Like a nerdier Ice Cube coming for N.W.A. with the “No Vaseline” diss track, Facebook put out its own statement, accusing Apple of “using their dominant market position to self-preference their own data collection, while making it nearly impossible for their competitors to use the same data…They claim it’s about privacy - but it’s about profit.”

So who is right?

The most generous way to interpret Facebook’s positioning here is to say that the data it collects from IDFAs really does help small and medium businesses, which make up the majority of Facebook’s 10 million advertisers, grow and survive the recent economic downturn via targeted ads. To give Apple the benefit of the doubt, one can look at how the company has historically been a strong advocate of user privacy, which it says IDFAs threaten. 

“Tracking can be invasive, even creepy, and more often than not it takes place without meaningful user awareness or consent,” wrote Horvath. “What some companies call ‘personalized experiences’ are often veiled attempts to gather as much data as possible about individuals, build extensive profiles on them, and then monetize those profiles.”

Facebook reckoned that Apple’s iOS14 changes would slash Audience Network revenue by up to 50%. It’s unclear how much of Apple’s revenue comes from Audience Network, but in the third quarter of 2020, Facebook’s total advertising revenue reached $21 billion. Other revenue streams generated just $249 million, demonstrating how much Facebook relies on advertising to make profits, and its fear that Apple might be able to dominate that market. 

“We are not fooled,” responded Facebook to Horvath’s letter. “This is all part of a transformation of Apple’s business away from innovative hardware products to data-driven software and media.”

Is Facebook just being paranoid?

Last year, Apple shut down Facebook’s access to apps and updates that run on its iPhone software in response to Facebook’s violation of Apple’s rules by publicly distributing a research app that allowed it to snoop on users’ online activity. This action restricted Facebook’s 35,000 employees from its internal iPhone apps, hindering their workflow and shutting down Workplace and Messenger. 

Apple eventually restored access, but the message wasn’t lost on Zuckerberg. Facebook might be the world’s biggest social network, but Apple controls the distribution of apps on its phones. And for someone like Zuckerberg — a man who idolizes the Roman Emperor Augustus Caesar so much that he is even rumored to mimic the ruler’s haircut — not having control is a major threat. 

That said, Morgan Stanley predicts that Apple’s advertising revenue will grow sharply in the next few years, up from the small portion it accounts for today. So is Apple strategically cutting off Facebook from harvesting user data so it can hoard it all for itself? 

That certainly seems like something a monopoly would do, and indeed Apple is facing legal action for its treatment of developers that rely on its dominant App Store. And as Zuckerberg has pointed out, how much can Apple truly care about its customers if it’s selling such expensive products?

But again, Apple’s whole schtick is about protecting user privacy, and it always has been. Apple co-founder Steve Jobs reportedly warned Facebook about privacy back in 2010, and today the company’s ads will boast how Apple keeps even your most embarrassing Google searches private. Pedaling back on that stance would not suit Apple’s brand image. 

What will the outcomes of this conflict be?

Despite the fact that Apple and Facebook sort of rely on each other and should have a strong working relationship, the philosophical differences between the companies have caused each to criticize the other for years. But until now, it’s just been bickering.

When Apple pushes out its App Tracking Transparency feature next year, that bickering might just turn into fists — that is, if the general cognitive dissonance of the mostly data-apathetic population is shaken up by the new feature at all. It doesn’t seem that Facebook can do much to retaliate, but give it time. An animal backed into a corner always finds a way.