The standoff between Apple and Facebook

Being two of the most influential companies operating in the world, both Apple and Facebook have lately been feeling the pinches of the other’s market endeavours. While Apple became the most valued Publicly Traded Company of the world in July 2020, Facebook with its gigantic investments in Jio and with other controversies has also been the talk of the town in recent days. Facebook and Apple have been criticizing each other for years on a range of issues, including privacy and consumer rights. Lately, Apple’s change in privacy policy has been ringing waves of discomfort for Facebook. This move of Apple is expected to have a negative impact on revenues of Facebook and other advertisers. Facebook also increasingly sees Apple as a competitor when it comes to its areas of growth, including messaging as well as its computing platform. How did this standoff reach where it’s today and what is the way forward?

Facebook and Apple are two of the biggest companies in the world, with very different points of view about user privacy. Apple has made user privacy part of its business strategy, even engaging in heated disputes with the Department of Justice to protect it. That’s because it deals in products and services and not user data and positions itself as the more private and secure alternative to Google, which very much does deal in data. Facebook was also built on user data, so its fights with the Department of Justice have been over user privacy violations by Facebook and Google.

But as Facebook (and several other companies) have pointed out, Apple has an incredible amount of control over every aspect of its devices. Apple mobile devices are only manufactured by Apple and can only use Apple’s operating system. Apple hardware must also use apps obtained through Apple’s App Store, and those apps have to meet Apple’s requirements, use Apple’s in-app features, pay Apple’s commissions, and compete against Apple’s own apps, which sometimes look a whole lot like their own. So Apple can make privacy part of its selling point for its customers, and it can also mandate it from any apps that want access to iPhone users. Even when those apps are made by companies as big and powerful as Facebook.

Apple’s tracking-optional mobile operating system update will be introduced in iPhones and the new privacy-preserving features will give users the ability to opt out of being followed around the internet via trackers in their apps. Facebook which makes the vast majority of its money from data collected through those trackers really doesn’t like Apple’s new features. Facebook has been considering to sue Apple, since Mobile Ads have been the biggest driver of Facebook’s revenue lately. Since Apple devices have apps that are pre-installed, it gives their apps several advantages that other apps would otherwise not have. According to Zuckerberg, some of the iOS 14 changes are going to be very problematic for the e commerce industry especially for small businesses.

Going back to at least 2010, Apple CEO Tim Cook strived to differentiate the way Apple views privacy from the views embraced by other companies. His criticism only intensified with the mishandling and the shady nature of Facebook and its Cambridge Analytica Scandal revolving around data privacy. “The truth is, we could make a ton of money if we monetized our customer – if our customer was our product,” Cook said at the time. “We’ve elected not to do that.” In the recent weeks since the incitement of violence and insurrection on Capitol Hill, Cook’s this criticism had sharpened further. “At a moment of rampant 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 all with the goal of collecting as much data as possible,” was the exact statement of Tim Cook, the CEO of Apple.

While previous regulatory penalties have addressed specific violations, many areas of Facebook’s operations such as groups and privacy settings remain out of lawmakers’ reach. Consumers are likely to be immediate beneficiaries of the standoff, with most consumers currently not aware of the tracking. The vast majority of Facebook users, 74% of them, did not know Facebook was tracking their interests until asked about it, according to Pew research. Apple’s new policy would prompt more users to opt in, and Facebook’s own policy will also inform more consumers about their rights. The data policy of Facebook plainly states that its data collection “includes information about the websites and apps you visit, your use of our services on those websites and apps, as well as information the developer or publisher of the app or website provides to you or us.” Now a dozen consumer and privacy groups in the United States have accused Facebook of deceptively rolling out expanded uses of its technology without clearly explaining it to users or obtaining their explicit “opt-in” consent. Facebook has other powerful techniques with implications users may not fully understand.

What does all this means to the user? Other than having some more privacy options when Apple’s update finally arrives this spring, probably not much for the time being. The ads won’t go away; they just won’t have as much access to your data to target them. Facebook has already said it will comply with Apple’s ATT requirements, so it won’t be pulling its apps from the App Store over this, nor will Apple be kicking them out. This is good for both companies because Apple’s users want Facebook’s apps (Facebook, Instagram, and WhatsApp) on their iPhones, and Facebook wants their apps in front of as many people as possible. They may be feuding publicly, as they’ve done for years, but their mutually beneficial relationship is still very much intact and should be in the coming years because of the market capitalisation that both these tech giants share.

By- Sejal Babel

Sources :

1. Investopedia

2. Livemint

3. The Wall Street Journal

4. NPR

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