- Key issues
Apple vs. Facebook: What's their privacy feud about?Apple's update strikes at the core of Facebook’s business model and they've decided to fight back. The stakes are high for both companies: we discuss the details of this very public feud.
By Klara Lee
Fri 14 May 2021
7 min read
Apple’s seemingly routine software update has caused a huge rift between Apple and Facebook. Updating to iOS 14.5 means that when iPhone users go to download an app that collects their data for advertising purposes, a notification will appear asking them if they want to allow the app to collect their data. If users refuse, Apple will prevent the app from doing so. To say the least, Facebook is not happy.
The update strikes at the core of Facebook’s business model and the company has decided to fight back. The stakes are high for both companies: let's delve into the details of this very public feud.
What is Apple doing?
The new iOS 14.5 update includes an ‘App Tracking Transparency’ feature that will be on by default and means that iPhone users are now explicitly asked whether or not they want their activities to be tracked by apps across the internet.
When a user downloads an app they will simply be asked to select either ‘Ask App Not to Track’ or ‘Allow’. For apps already downloaded, users will have to go into their settings, click ‘Privacy’, ‘Tracking’ and then click the toggle to opt-in to allow apps to share their data.
Asking an app not to track you means that it isn’t allowed to transmit any identifiable information about you, such as your location, contact details, health information, browsing history, and more with advertisers, data brokers, or anyone else who might be interested in knowing more about you.
Apple does this by enabling or disabling an app’s access to a unique device identifier that exists on every iPhone and iPad, called the IDFA (identifier for advertisers). The IDFA can also be paired with other tech, such as Facebook's tracking pixels or tracking cookies, which follow users around the web to gather even more information about them.
Why is Apple doing this?
Apple makes money from selling it’s devices and in-app purchases, rather than from advertising, so it has little interest in tracking its users. It has also always marketed itself as a privacy-first company.
Back in 2010, Apple co-founder Steve Jobs said people should always be informed about how their data is being collected and shared: ‘Privacy means people know what they're signing up for, in plain English and repeatedly... ask them, ask them every time’. Recently, current CEO Tim Cook said: ‘If a business is built on misleading users, on data exploitation, on choices that are no choices at all, it does not deserve our praise. It deserves reform.’
On April 26th 2021, Apple launched an ad that briefly explained the new ‘App Tracking Transparency Feature’ and why it is important, saying that some apps are collecting ‘thousands of pieces of information about you to create a digital profile that they sell to others’ and they can also use it ‘to predict and influence your behaviour and desires...without your knowledge or permission’.
Aside from Apple’s commitment to privacy, there are also financial reasons that could have motivated the introduction of this feature. We’ll come onto that shortly.
What is Facebook’s response?
This privacy-focused update seriously threatens the source of Facebook’s near $86 billion in annual revenue: targeted ads. Surveys suggest that up to 80% of users will say no to letting apps track them.
In response, Facebook has been running full-page ads in newspapers such as The Wall Street Journal, The New York Times and The Washington Post arguing that Apple’s update will harm small businesses. Facebook has also launched a website where small businesses can share their stories about how personalised ads have helped them, and are encouraging others to tell their story by using #SpeakUpforSmall.
Facebook’s recent blog more overtly criticised Apple’s decision. Firstly, Facebook claimed it was ‘speaking up for small businesses’ who would be hit hardest by the reduction of targeted ads, especially during the pandemic when there are limited ways to reach customers. Although many might question this being the multi-billion dollar company’s primary concern, Facebook does have a point. The internet has made marketing accessible and affordable, small businesses make up the majority of sellers on Facebook and they do rely on ad-targeting tools to market themselves.
Although Facebook says that ‘without personalised ads powered by their own data, small businesses could see a cut of over 60% of website sales from ads’, the Harvard Business Review says Facebook's findings are ‘misleading’. ‘These customers would have generated high revenues anyway,’ the Review found. ‘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 the personalised ads’.
As well as its ‘concern’ for small businesses, Facebook points out how Apple will monetarily benefit from the update. If content creators can no longer make money from advertising they will likely turn to charging people for a subscription or in-app payments, and those fees are subject to an Apple tax ranging from 15% (for small businesses) to 30%. Facebook points out that since device sales are slowing for Apple, more of their profits come from the App Store platform, which grossed around $50 billion in 2019.
Facebook also points out multiple ways in which Apple is hypocritical in its outspoken pledge for privacy. For one, Apple has its own advertising business. Although it only operates within its app store (companies can pay to promote their apps on the app store pages) it’s exempt from the new prompt requirement that they’ve imposed on other companies.
Also, Apple produces its products in China, a country notorious for encroaching on its citizen’s privacy. To operate there, Apple had to concede to a rule that iCloud data had to be stored in mainland China rather than in the US. Simply by operating in China Apple is arguably being hypocritical. Apple also operates closely with Google, for example Siri is operated by it, and some would say that Google is just as bad as Facebook for its privacy and data-sharing practices. It seems like Apple is situationally looking the other way when it suits its own business model.
Finally, Facebook’s blog argues that there does not have to be a tradeoff between personalised advertising and privacy, saying that Facebook ‘can and do provide both’. However, given Facebook’s poor history with data protection, users have good reason to doubt this statement.
Request your data from Facebook
So, should I opt-in or opt-out?
Ultimately, Apple’s argument is stronger. Apple is allowing users to have more control over their data and simply say that they would prefer their activities are tracked less on their phone than more. Facebook’s argument is more vague and hazy, they are saying: ‘we stand up for small businesses so you shouldn’t have the option to not be tracked’.
If you rely on Facebook's advertising to direct you to services and products you buy and enjoy, then you should expect to see less relevant ads if you opt-out.
But, there are some strong reasons to decide to opt-out of being tracked. The average app includes six third-party trackers that are there solely to collect and share your data with advertisers. Some apps collect far more data than they need to provide their service, for example TikTok is being sued for collecting excessive amounts of children's data. Additionally, the law contains many nuances that some companies are constantly trying to exploit in order to get away with sharing user data for profit. In this context, it could be safer to simply restrict their access to your personal data altogether.
How can you tell if the feature is working?
After updating your software it may not seem like anything on your phone or on your apps has changed. There are no obvious changes in which ads you see or how the apps work to indicate that the feature is working.
According to Gennie Gebhart, activism director of the Electronic Frontier Foundation (the internet-rights advocacy group), if you’re searching the internet for grills and then see ads for them on Facebook, that doesn’t necessarily mean that the tool isn’t doing its job. The tracking and ad-targeting system within Facebook is so complex and multi-layered that there are many ways Facebook could determine that you want a grill just from your activity on its own app. For example, they may have been able to determine from other sources that you’re a middle-aged, male homeowner.
Gebhart adds that it will be, and always has been, difficult for a typical user to know if one of their apps is breaking the rules because of how little consumers know about how these apps function: ‘It’s really only Apple or highly skilled researchers who could effectively monitor any shady data collection’.
What is the history of this feud?
A ‘cold war’ has been occurring between the two companies for a decade now. At first Apple and Facebook seemed to have a symbiotic relationship, both relied on and trusted each other's services to help their own. Over time however, the two became competitors that dabbled in each other's services. For example, Facebook now competes with Apple with its instant messaging services and even tried to create its own phone in 2013. After Facebook’s 2018 Cambridge Analytica scandal, Apple likely realised privacy could be even more of a key differentiating feature. Apple began releasing features such as no tracking cookies on Safari, and also added screen time tracking to reduce time users spent on apps such as Instagram (owned by Facebook).
Apple is unlikely to back down, with their CEO pointing out that Facebook can still track its users, it simply needs to get their permission first. And since Facebook has a poor track record when it comes to user privacy, it seems unlikely that users will give it permission to track them.
So the question is, will Facebook start charging money for the use of its app? Or will they continue to apply pressure and attempt to find a way around Apple’s new rule?
Although the average person might be uncomfortable with the idea of being tracked across the internet and want to opt-out of being tracked, in recent months people are also joining and using Facebook and Instagram in record numbers. It will be interesting to how these tensions resolve and most importantly, what it will mean for you and your personal information. We'll keep you updated.
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