Apple and Facebook should not be invited to the same dinner party. Facebook fired another salvo at the iPhone maker on Wednesday accusing the company of anticompetitive behavior. Dan Levy, Facebook Vice President for Ads and Business Products, dropped the bomb in front of reporters when he said “Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of creators and small businesses. Full stop.”
Apple, which has been preaching privacy for its devices (especially the iPhone), is looking to prevent developers from using their apps to start tracking users and running targeted advertisements. Apple says that its new rules won’t force Facebook to change its “approach to tracking users and creating targeted advertising.” But it will force Facebook to give iOS users the option whether or not to opt in to these services. In a statement, Apple said, “We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not.”
Today, Facebook ran a full-page ad in major newspapers throughout the country. The ads criticized Apple for limiting apps from gathering information from others’ phones. This data is used to send targeted advertisements to consumers. But Facebook says that Apple is unfairly exempting its own ads platform from the new requirements it is imposing on other firms.
During the summer, Apple said that a pop-up notification will ask iOS users for “permission to track them across apps and websites owned by other companies.” Most digital advertisers expect consumers to decline this request. Facebook’s Levy said that while his company doesn’t agree with Apple, it will comply with the new rules. “We don’t have a choice if we want our app to be available in the App Store, Levy stated. Apple and Facebook have also argued about the 30% cut of in-app purchases that Apple charges developers. Facebook has aligned itself with the small developers most affected by what is known as the “Apple Tax.” This is the same issue that has led Apple and developer Epic Games (creator of Fortnite), music streamer Spotify, and video streamer Netflix to complain about the 30% of in-app revenue that goes into Apple’s pockets.
Facebook said today in its blog post that it was “committed to providing relevant information” in a “federal antitrust lawsuit filed by Epic Games.” Facebook wouldn’t specify how it planned to take part in the litigation.” The social media giant also paid for full-page ads in the New York Times, the Wall Street Journal and the Washington Post. The headline on the ads read, “We’re standing up to Apple for small businesses everywhere.” The ad says, “At Facebook, small business is at the core of our business. More than 10 million businesses use our advertising tools each month to find new customers, hire employees, and engage with their communities. Many in the small business community have shared concerns about Apple’s forced software update, which will limit businesses’ ability to run personalized ads and reach their customers effectively.
Forty-four percent of small to medium businesses started or increased their usage of personal ads on social media during the pandemic, according to a new Deloitte study. Without personalized ads, Facebook data shows that the average small business advertiser stands to see a cut of over 60% in their sales for every dollar they spend.
While limiting how personalized ads can be used does impact larger companies like us, these changes will be devastating to small businesses, adding to the many challenges they face right now. Small businesses deserve to be heard. We hear your concerns and we stand with you.”
The bottom line is that Apple’s plan to beef up iPhone users’ privacy by asking them to opt in if they want to see targeted advertisements is not good for large or small businesses. And Facebook call this anti-competitive behavior on the part of Apple.
