Facebook vs. Apple: Here’s what you need to know about their privacy dispute

A privacy change in the software that powers Apple’s popular iPhone has sparked a war of words in Silicon Valley.

The iPhone maker will launch an update for its iOS 14 operating system in the coming months that asks you to give apps permission to track your activity on other apps and on the web. This change may seem small. Many applications already track our activity on the web through default settings that we accept when we install them.

Facebook, however, is furious about the change, which threatens the source of its $ 86 billion annual revenue: targeted ads. The social network waged a months-long campaign against Apple, showing full-page ads in national newspapers and testing pop-ups within the Facebook app to encourage users to accept their tracking. It is also alleged that Apple’s changes are aimed at helping the iPhone manufacturer’s own businesses, rather than protecting consumer privacy.

“Apple can say that it is doing this to help people, but the moves clearly track their competitive interests,” said Facebook CEO Mark Zuckerberg in January during the company’s fourth quarter earnings conference call. Apple CEO Tim Cook says the change is rooted in the company’s belief that “users should have a choice about the data being collected about them and how they are used.”

The dispute highlights a fundamental difference between technology giants: how they make money. Apple sells smartphones and laptops and cuts the fees charged to application developers. Facebook sells ads that it can target accurately based on the data it collects from its 2.8 billion monthly users. These business models inform your approach to privacy.

Here’s what you need to know about the struggle between Apple and Facebook:

I had the basic idea. But would you go back to the beginning?

Right. It is complicated and has been boiling slowly. Apple said at its annual developer conference in June that it would introduce an iOS feature that required users to give apps permission to track them across multiple apps and websites. As we said, this is a common practice, but users are often unaware of it because it is buried in terms of service or privacy policies. Who reads this?

With the iOS update, iPhone users will see a pop-up that explicitly says that an application wants to track them. Application developers can use this pop-up to explain how user data will be used. Facebook, for example, uses this data to show people personalized ads.

The pop-up will also give users a chance to cancel tracking. Many will probably do so.

“Tracking refers to the act of linking user or device data collected from your application with user or device data collected from other companies’ applications, websites or offline properties for targeted advertising or advertising measurement purposes. Tracking also applies to refers to sharing user or device data with data brokers, “Apple explained to developers in a blog post about iOS 14 updates.

How can this change affect me?

It depends on how often you look at the ads. If you don’t deal with them often, you probably won’t notice much of a change when you opt out of tracking.

If you rely on Facebook advertising to direct you to the services and products you buy, expect the ads you see to be less relevant if you choose to leave.

The prompt will also give you an idea of ​​what apps are tracking you on other apps and sites to serve ads.

How did Facebook respond to the impending change?

Facebook was clearly dissatisfied with Apple, and the company made it public. The social network ran full-page ads in The Wall Street Journal, The New York Times and The Washington Post, arguing that Apple’s update will hurt small businesses and consumers. The social network’s claims have been contested by academics. (More on that below.)

The social network also launched a website where small businesses could share their stories. The page includes videos of small business owners who support personalized ads and encourages others to tell their stories using #SpeakUpforSmall. Many of these small businesses say they rely on social media ads to attract more customers.

Facebook’s arguments also reflect its own interest in the effects of the change, which will certainly weigh on its revenue. During his fourth-quarter earnings conference call, Zuckerberg repeatedly revisited the matter and complained about Apple.

“We have a lot of competitors who make privacy claims that are often misleading,” he said. He added that Facebook, which has its own messaging service, Messenger, as well as WhatsApp, sees Apple as a competitor because of the popularity of iMessage.

Dan Levy, who runs the Facebook ad business, said in a blog that the change in Apple’s policy is “about profit, not privacy”. He said the change in iOS would force some apps to opt for in-app purchases and subscription fees, of which Apple can get a cut of up to 30%. (Apple launched a new program earlier this year to reduce commission to 15% for small businesses with revenues of up to $ 1 million a year.)

Facebook has a poor record when it comes to user privacy, and it seems unlikely that users will give you permission to track them. The company’s reputation for protecting privacy has been tarnished by the 2018 scandal involving Cambridge Analytica, a UK political consulting firm that collected data from up to 87 million users without their permission.

Zuckerberg defends Facebook’s business model, saying the ads allow the social network to offer the site to users for free. “If we are committed to serving everyone, then we need a service that is accessible to everyone,” he said in a 2019 opinion piece in The Wall Street Journal.

What is Apple’s argument?

Apple says its changes give users more control over their data and transparency over what is collected.

“If a business is built on deceptive users, on data exploitation, on choices that are no choice, it does not deserve our praise,” Cook said during a speech last month in a veiled Facebook scam. “He deserves reform.”

The vision is not new. In the wake of the Cambridge Analytica scandal, Cook told technology journalist Kara Swisher and Chris Hayes of MSNBC that “if our customer were our product, we could make a lot of money. We decided not to do that.”

Is Facebook overreacting?

It depends on who you ask. Facebook says on its blog that “without personalized ads driven by their own data, small businesses could see a cut of more than 60% in ad sales on the site”.

Harvard Business Review says Facebook’s findings are “misleading” and suggests that the impact will be modest. “These customers would have generated high revenues anyway,” concluded Review. “That’s why they were targeted in the first place. So it would be a mistake to conclude that these customers spent more because of personalized ads.”

Cook also pointed out that Facebook can still track users. He just needs to get their permission first.

Facebook is not the only one to warn that changes could hurt its ad sales. Snapchat expressed support for Apple’s changes, but CFO Derek Andersen said during the conference call that the change represents “a risk of disruption” in the demand for advertising. Twitter suggested in its letter to shareholders in the fourth quarter that the changes could have a modest impact on its performance, but gave no further details.