- Apple’s upcoming privacy feature provides users option to opt-in for ad tracking.
- Facebook, Google fear it may significantly reduce their ad revenues from iOS platforms.
- Small businesses trying to reach out to potential customers may also be affected.
Apple and Facebook have renewed their old rivalries this week over Apple’s new privacy tool that will allow users to choose if they want ad-trackers on their iPhones and iPads.
The iPhone company plans to release an update to its privacy tool called App Tracking Transparency (ATT) later this year, after a delay in the original plan to launch the feature last September.
Apple’s new privacy tool can put scores of internet advertisers in a disadvantageous position, and many of whom fear that it may lead to drastic earnings drop.
Speaking at a Consumer Privacy and Data Protection Conference on Thursday, Apple CEO Tim Cook accused the social media company of targeting users for ad sales by unethical means.
Mr. Cook said that companies that pride on engagement and algorithms and spread disinformation and conspiracy theories to collect user data for advertising do not deserve any praise.
His sharp remarks came after Facebook CEO Mark Zuckerberg also accused the iPhone company of unnecessarily meddling in Facebook’s app-tracking features.
Mr. Zuckerberg pitied their differing views as one between the supporters of a free app, like Facebook, and the privacy-conscious, fee-based players like Apple.
He also criticized Apple’s popular iMessage service and described the iPhone company as one of its most formidable competitors.
Protecting Users’ Digital Footprints
Underscoring Apple’s plan to protect the digital footprints of its users from various app trackers, Mr. Cook said the new privacy feature would give them an option to opt-in if they chose to do so.
This will prevent Facebook and other companies to collect users’ data without consent.
The Facebook CEO further alleged that the iPhone company often takes advantage of its dominant position in the market to interfere with the works of the rival app companies for their own gain.
Impact on Digital Ad Revenue
In remarks to investors after presenting the company’s quarterly report on Wednesday, Mr. Zuckerberg claimed Apple’s new tool could jeopardize millions of small entities across the globe.
It is feared that the opt-in feature may encourage users to reject a request, and that may lead to a collapse of ad prices, creating more hurdles for the small firms struggling to reach out to customers.
Google, which also earns significant revenues from internet advertising, in a blog post expressed concerns that Apple’s new privacy tool may impact its ad income from the iOS platforms.
With around 1.85 billion users, Facebook is the world’s largest social media company and earns huge sums of revenue from digital advertising, which relies on collecting users’ data. But the company is dependent on Apple since its users access its apps through Apple’s hardware.
The social media company had earned over $84 billion in advertising revenue in 2020.
Apple, on the other hand, earns most of its revenue through iPhones and other devices.
After posting impressive fourth-quarter results on Wednesday, share prices of these two most influential companies were slightly down but regained in the following session.
On Jan 29, 2020, Apple (NASDAQ: APPL) and Facebook (NASDAQ: FB) shares were trading flat at US$135.76 and US$264.09, respectively.