Apple wants to make tracking iPhone users harder and Facebook is upset

Facebook Inc. has fought against Apple Inc. in a series of full-page newspaper ads, claiming that the upcoming changes to the iPhone maker’s mobile software in terms of data collection and targeted advertising are bad for small businesses.

The ads, which ran in the New York Times, Wall Street Journal and Washington Post on Wednesday, were headlined, “We’re advocating small businesses everywhere at Apple.” They learn about upcoming changes to Apple’s iOS 14 operating system that will limit the ability of companies like Facebook to collect data about users and target them with targeted advertising.

Facebook previously told investors that Apple’s changes, due to be released early next year, will create significant headwinds as most of its advertisers are small businesses. Apple pushed back and accused Facebook in November of “neglecting user privacy”.

“While restricting the use of personalized ads is affecting larger companies like us, these changes will be devastating for small businesses,” said Facebook.

Ads that don’t take personalized targeting into account generate 60 percent less revenue than ads aimed at consumers, Facebook added, citing its own data. Apple’s new feature that is at the heart of the problem – App Tracking Transparency – doesn’t prohibit companies like Facebook from collecting target data, but instead encourages them to disclose it and enable users.

In a conference call and blog post on Wednesday, Facebook continued its attack, saying that Apple’s business will benefit from these changes. “Apple is anticompetitive by using control of the App Store to improve bottom line results at the expense of developers and small businesses,” said Dan Levy, director of Facebook’s small business program. Facebook was sued by state and federal regulators earlier this month for alleged anti-competitive behavior.

Apple defended its iOS updates, saying it stood for people who use its devices. “Users should know when their data is being collected and shared with other apps and websites – and they should have the choice of whether or not to allow this,” an Apple spokeswoman said in a statement. “For app tracking transparency in iOS 14, Facebook doesn’t need to change its approach to user tracking and targeted advertising. It just requires users to have choices.”

The newspaper ads are the latest in a vicious public battle between two of the world’s most valuable companies. Facebook has repeatedly argued that Apple’s App Store fees and the upcoming iOS changes are hurting small businesses trying to recover from the pandemic. It has used these attacks to profile itself as a champion for those users, many of whom rely on Facebook’s advertising services to drive sales. This trust can also get small businesses in trouble if they are cut off from the social network.

Facebook also said Wednesday that it will provide evidence for Epic Games in its ongoing lawsuit against Apple. Epic, maker of the popular Fortnite video game, sued Apple after Apple removed Fortnite from the app store for violating in-app purchase rules.

Earlier this week, Apple introduced a nutrition label-style feature to its App Store that describes what data third-party apps collect. This was viewed by some as an attack on the Facebook app due to the amount of information it gathered.

Mark Zuckerberg, Facebook’s chief executive officer, has also criticized Apple’s smartphone prices. After his company joined a chorus attacking Apple’s 30 percent fee for in-app purchases for certain services that went online due to the pandemic, Apple said there would be no such cut by the end of 2020. Last month, this waiver was extended to June 2021.

Apple defended its ad tracking changes, citing recent comments from two of its top executives. Privacy director Jane Horvath recently said Apple made the change “because we share your concerns about the tracking of users without their consent and the pooling and reselling of data by ad networks and data brokers.”

In a public letter, Horvath also criticized Facebook for its approach. “Facebook managers have made it clear that they intend to collect as much data as possible on first and third party products in order to develop and monetize detailed profiles of their users. This disregard for user privacy continues to grow and encompass more of their products, “she wrote.

Craig Federighi, Apple’s head of software development, spoke at a panel last week for an event hosted by the European Conference on Data Protection and Privacy in Brussels.

“It is already clear that some companies will do whatever it takes to stop the app tracking transparency feature – or a similar innovation – described earlier – and maintain full access to people’s data,” said Federighi.

While this doesn’t apply to Facebook apps, Apple will cut App Store revenue from 30 percent to 15 percent starting next year, when developers generate up to $ 1 million a year. The company said it was implementing the change to help small businesses.