Welcome to the News Byte, an in-depth look at one of the most important stories about the internet this week.
Apple Vs. Facebook
A new privacy feature is coming to your iPhone. In an update expected this spring, users will see a new prompt in many apps asking if it’s okay to collect and share information about their actions online. For once, this pop up will be welcome news. Well, not if you’re Facebook.
Facebook’s apps like Instagram and WhatsApp cost $0.00 to use but helped earn the company $29 billion last year in profit. “That math doesn’t add up,” you say. It does when you add in their online advertising business model that includes staggering amounts of user tracking. Facebook tracks what you do on its platform, off its platform and within its mobile apps. It then uses that data to inform marketers on how to advertise to you.
98% of Facebook’s earnings last year came from its advertising business — and it’s clear the company fears a pay cut when the feature launches. In December, Facebook took out a full-page ad in the Wall Street Journal to claim Apple’s “track/don’t track” pop-up option is anti-small business. Now, Facebook is building a legal case against Apple, saying the company’s anti-competitive behavior comes at the expense of app makers and small businesses. The company will also provide a preemptive opt-in message before Apple’s pop-up appears onscreen.
Our take: we’re with Apple on this one. It’s part of why we built Facebook Container. In fact, Mozilla has been calling on Apple to make this fundamental, privacy-protecting change for users since 2019. As for Facebook, it’s tough to tell whether the company is interested in protecting small business or their business.
The Basics
Apple’s side of the story, via Engadget
“The fact is that an interconnected ecosystem of companies and data brokers, of purveyors of fake news and peddlers of division, of trackers and hucksters just looking to make a quick buck, is more present in our lives than it has ever been….And it has never been so clear how it degrades our fundamental right to privacy first, and our social fabric by consequence.” — Apple CEO Tim Cook at CPDP 2021
Facebook’s side of the story, via Ars Technica
“Last week, Facebook CEO Mark Zuckerberg told investors on the company's quarterly earnings call that they should soon expect reduced advertising revenues from the company as a result of Apple's change in policy, because many if not most users will opt out when presented with the choice. He also claimed that Apple's move to require opt-in from users for IDFA tracking is one of many examples of Apple engaging in anti-competitive and monopolistic practices.”
NBC News: Apple v. Facebook: After years of tension, a legal battle looms
“The changes, which will go into effect this spring, will directly affect Facebook's lucrative advertising business by curtailing its ability to collect data on some Apple users.
...In recent months, Facebook has been building an antitrust lawsuit that accuses Apple of using its App Store to disadvantage competitors, said three people at Facebook who were not authorized to comment publicly on the matter, confirming a report from The Information.”
Going Deeper
Mozilla: Thank you, Apple for Standing Strong for Privacy
“In recent months, Apple committed to give users more control of their privacy and just announced that this important change known as App Tracking Transparency will be enabled by default on iOS in early spring. It’s a huge win for consumer privacy. More than 40,000 Mozilla supporters joined together to thank Apple and say ‘stand strong.’”
GQ: Tim Cook on Why It's Time to Fight the "Data-Industrial Complex"
“Think about for a moment, if you all of a sudden find out that you're being surveilled every moment of the day. Your online life is being surveilled. And if somebody develops a 360 degree view of that, what is going to happen to your behavior over time? You're going to restrict it. You're going to begin thinking, Well, I don't really want somebody to know that I'm exploring that, or looking at that, or investigating that. And you're going to restrict and restrict and restrict. And who wants to be in that world where we're self-censoring ourselves in such a mass way across society that you wind up with people that are thinking less, feeling less, doing less? This is not an environment any of us wants to be a part of. And I worry that that's where we're currently headed.”
EFF: Facebook’s Laughable Campaign Against Apple Is Really Against Users and Small Businesses
“So why the outcry from Facebook? Facebook claims that this change from Apple will hurt small businesses who benefit from access to targeted advertising services, but Facebook is not telling you the whole story. This is really about who benefits from the normalization of surveillance-powered advertising (hint: it’s not users or small businesses), and what Facebook stands to lose if its users learn more about exactly what it and other data brokers are up to behind the scenes.”
Bloomberg: The Privacy Spat Between Facebook and Apple Is Just the Beginning
“Executives at Facebook worry that Apple will frame the choice in an alarmist way, effectively pushing users to reject tracking. Facebook Chief Financial Officer Dave Wehner told analysts that he expects ‘high opt-out rates’ for Apple’s prompt, and Facebook has said these changes will impact its business moving forward. It plans to front-run Apple’s prompt with messaging of its own, framing advertising as a way to have a better experience on Facebook and support businesses that rely on targeted ads for sales.
Whatever the outcome, the dispute points to further tension ahead.”
Meanwhile, Elsewhere
CNET: Google switches ad tracking tech ahead of Apple privacy update
“‘When Apple's policy goes into effect, we will no longer use information (such as IDFA) that falls under [App Tracking Transparency] for the handful of our iOS apps that currently use it for advertising purposes,’ Google said. ‘As such, we will not show the ATT prompt on those apps, in line with Apple's guidance.’”
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