February 18, 2021

For years, Apple and Facebook have clashed over both privacy and consumer rights. But tensions between these tech titans have now reached a climax as Apple’s incoming privacy policy change will irrevocably dent Facebook’s revenue. Earlier this year, speaking at the EU data protection conference, Apple CEO Tim Cook reprimanded Facebook’s entire business model, stating, “if we accept as normal and unavoidable that everything in our lives can be aggregated and sold, we lose so much more than data, we lose the freedom to be human.”

Shaping both cultural and technological trends, Apple has always been ahead of the curve. In the early 2000s, the company had the foresight to take over the portable music industry, shaping an entire generation’s consumption of music with the iPod. A decade later, Apple was first to mass market the now-ubiquitous smartphone. In today’s era, Apple is again correctly identifying the “next big thing.” Like a deft chess player, Apple has been strategically positioning themselves as a bulwark against big-tech intrusion into our personal lives, in the growing global trend of concern and consciences about privacy on the web.

Over the last several iOS updates, Apple has been bringing privacy closer to the forefront. Apple’s internet browser, Safari, blocks trackers when you browse the web. Apple’s voice assistant, Siri, largely exists and operates on the device itself, not sending data to and from any external services. When using Apple’s native Maps application, your routes and destinations are anonymized. Apple Pay, in contrast to Google’s Wallet, not only ensures security, but also explicitly states that it will never track your transactions. iOS 14, Apple’s latest iteration of their mobile operating system, goes even further in bolstering security. Users can now toggle an app’s permission to either track location at all times, or only while using the app. Moreover, users can choose to give an app permission to access only a subset of their photos, or all of their photos. On newer iPhone models, you have an indicator on the top of the device that shows when the microphone and camera are active, even if the camera app isn’t being used.

Now, Apple is looking to take this even further and tackle tracking that occurs from app to app. With the introduction of iOS 14 at Apple’s World Wide Developers Conference (WWDC) 2020, Apple introduced the App Tracking Transparency Framework. From a user’s perspective, this is simply a new popup that asks, “would you like to allow the app to track you within the app and between apps and on the web, or would you like to ask the app to not track you” — the latter option effectively kills the tracking abilities of the app. In short, Apple will now force app developers to ask users for their explicit permission to track them. 

Apple CEO Tim Cook himself shared a screenshot of the upcoming popup on Twitter.

Though such an inquiry to users appears both trivial and innocuous, it comes with spates of implications for such social media giants as Facebook and Google. Firms whose business models are entirely based on offering ostensibly “free” services to users in exchange for slyly siphoning their data now stand to lose billions in revenue as Apple aims to bring transparency to social media on their devices. Presumably, many users, when explicitly asked if they want their location and other metadata harvested and fed to advertisers, will resolutely renege. 

Facebook demands no monthly subscription and offers no in-app purchases from its nearly 3-billion users. Scrolling, posting, commenting, reacting is all seemingly done for free. One might ask, how does Facebook make money, let alone amass a valuation of $780 billion? 

Imagine you’re a florist looking to expand your customer base. A primitive, pre-data-mining era solution would be to take out an ad in the yellow pages or the local paper and hope enough people interested in flowers see your ad. But this is both costly and random, rendering it ineffective. There is no way to weed out people who wouldn’t be interested in your business, requiring you to instead target everyone. A more modern solution would be to turn to Facebook. Presiding under the assumption that nearly everyone in your town is already on the social media giant, it’s safe to assume that Facebook’s vast data servers know more about your town’s denizens’ shopping habits than you do. A simple online Facebook ad could cut through the uncertainty, and directly target people who would potentially be interested in your product or service. Facebook knows who’s getting married, Facebook knows who has upcoming anniversaries or birthdays, Facebook even knows who has recently been shopping for flowers online. It knows exactly who might be interested in your business. The more that Facebook can learn about you, the more metadata they can collect, the more lucrative you become to them as a pawn for the whims of advertising firms.

Apple’s upcoming software update jeopardizes all of this for Facebook. While a boon for safety-conscience consumers, this privacy-first attitude from Apple poses bleak financial implications for social media firms and major advertisers who rely on exploiting people’s data for personal, targeted ads. 

If Facebook wants to keep its app on the Apple App Store (which they obviously do) they will be required to ask users to knowingly and voluntarily opt in to having their metadata – this includes their location, the date and time specific actions are performed, the specific iPhone model they are using, etc. — collected by Facebook, while using their app.  

A Forbes article pointed out that as a result of this change, Facebook could lose as much as ten billion dollars. “About $10 billion in Facebook revenue might be at risk in the short term. If its ads lose relevance and therefore return poorly on advertiser’s investments, that $10 billion could turn into $5 billion pretty quickly.”

Moreover, rumors suggest that Apple is looking to eventually replace Google as the default search engine, in a future iOS release, with a safer and more privacy-centric option. While there are no official reports of this, Apple’s past behavior of acquiring third-party firms focused on a particular niche (for example, their acquisition of Beats By Dre in 2014) could point to a future deal whereby Apple purchases the privacy boasting search engine, DuckDuckGo, and rebranding as a “Siri-dot-com” service of their own. 

This wouldn’t be an unprecedented move for the company best known for its hardware products. Though few people remember it today, nearly a decade ago, in 2012, Apple made a short-lived foray into social media with an attempt called “Ping” — a music-centric social media network; one of Apple’s few failures that was shortly discontinued.  

Consequently, Facebook’s CEO Mark Zuckerberg has gone to war against Apple. Even forming a major antitrust lawsuit against Apple over their gall to prompt their users when they are being tracked. Facebook’s fundamental argument is along the lines of, Apple users should not be asked about their privacy. Ironically, Facebook itself is currently facing two separate antitrust lawsuits from the FTC (Federal Trade Commission) and state authorities.

Further retaliating against Apple, Facebook took up real estate in the pages of major newspapers such as the Washington Post, the New York Times, and the Wall Street Journal. In efforts to spin the narrative, Facebook’s ads purported that Apple’s move towards greater privacy would, “limit businesses’ ability to run personalized ads and reach their customers effectively.” 

According to Facebook, over 44% of small and medium sized business increased their spending on social media in FY2020. Feigning concern for small businesses, Facebook added that Apple’s temerity to ask users to willingly consent to having their data collected would cause, “the average small business advertiser… to see a cut of over 60% in their sales for every dollar they spend.” 

Apple’s CEO, Tim Cook, speaking at the 2021 Computers, Privacy and Data Protection conference on January 28th retorted, “Technology does not need vast troves of personal data, stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it. We’re here today because the path of least resistance is rarely the path of wisdom.” 

Cook went on to add, “If a business is built on misleading users, on data exploitation, on choices that are not choices at all, then it does not deserve our praise. It deserves reform. We should not look away from the bigger picture… In a moment of rapid disinformation and conspiracy theories juiced by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement. The longer the better and we can go on collecting as much data as possible.”

For now, Apple has delayed the rollout of this prompt, giving developers time to get everything implemented and running. But starting with the next iOS Beta, the prompt will be officially launched. 

Through their pivot from strictly desktop internet to mobile, Facebook has rendered themselves largely powerless, at the mercy of the hardware and software vendors whose frameworks support their apps.  With firm control over their devices and their customers’ trust in their financial interest, Apple is well positioned to wipe out entire swaths of Facebook’s revenue, and there isn’t a whole lot Facebook can do about it.

Originally Published at The Daily Wire