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Summary
- In recent weeks, Apple and Facebook have been arguing over a new privacy policy that Apple is planning to employ in iOS 14.
- Facebook has made several allegations against Apple, saying the new scheme will hurt small and middle-sized businesses that largely depend on personalised ads.
Public disputes between tech giants Apple (NASDAQ:AAPL) and Facebook (NYSE:FB) are no secret, but tensions in recent days have escalated over new privacy policies that Apple wants to implement in its devices by early next year.
Namely, Apple is preparing to bring in a mechanism that will allow its customers to choose if they want to be traced through third-party apps.
In response, Facebook has come out swinging as the new practice could possibly become a significant issue for the social media giant’s business model which is based on the ability to use personal data to target particular advertisements.
Some advocates within the tech field have welcomed Apple’s decision, saying the move will usher in a significant change in the company’s transparency policy, enhancing privacy for iPhone users.
On the contrary, Facebook argues that the above-mentioned strategy could hurt small businesses, explaining how Apple is more focused on its profit rather than users’ privacy.
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How did Facebook respond?
Dan Levy, Vice President of advertisements and commercial products at Facebook, explained a blog how Apple would force businesses to make in-app payments instead of allowing free services.
According to Mr Levy, Apple’s new strategy is designed to boost its revenue, which could, consequently, lead to some enterprises giving up on the online ad market.
But Mr Levy’s blog post was not the only thing Facebook did to call out Apple’s strategic behaviour.
The social media company also designed a website Speak Up for Small Businesses, which contains testimonies from people relying on personalised ads through the Facebook app.
In a written statement, Facebook predicted that small and middle-sized businesses could lose 60 per cent of their ad revenue in case Apple integrates the new feature into the iOS 14 software update.
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DO WATCH: How will the recent tussle between Apple and Facebook over data privacy impact their business?
Did Apple react to the allegations?
In response to Facebook’s scathing critique, Apple stood its ground, announcing that it will carry on with the new privacy plan.
In a recent statement, the company addressed the importance of privacy issues and giving its users a choice to opt in or out of providing personal information to third-party sources.
A symbiotic relationship between Apple and Facebook
Even though the two tech companies have been in significant disputes recently, both Apple and Facebook are highly reliant on each other.
Apple continues to be in favour of lesser online ads and more in-app purchase practice. On the other hand, Facebook wants to offer free internet experience for its products while charging publishers for ads.
Even though the corporations are completely different in how they earn money, Apple and Facebook need each other to boost their revenue. For example, Facebook requires to be available in the Apple Store, while Apple needs the most used apps (Facebook, Instagram, WhatsApp, among others) to attract its users.
However, the watchdogs in Europe and the US have made it clear that regulating both Apple and Facebook are high on their business agenda.
Due to several antitrust lawsuits that Apple and Facebook are facing, regulators will introduce new policies that would allow consumers to understand how the companies are using them for profit.
In case the tech firms do not comply, they will face significant fines or even be forced to divide their business into more divisions.
