You may have heard about Apple and Facebook in the news recently for their recent spat
over a new policy in iOS 14. Apple is requiring developers like Facebook to receive
express permission from users to track them across apps and websites. Facebook is worried that most
users won’t give them that permission, which will make their advertising products less profitable.
The two companies have now officially became rivals. And in this video, we’re going to
find out how their relationship evolved to this point, and what the conflict looks like today.
This is Greg with Apple Explained, and I want to thank NordVPN for sponsoring this video.
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Alright now the rocky relationship between Facebook and Apple began a long time ago,
when the iPhone had just been released and companies were figuring out the best way for
mobile devices to access online services. There were two approaches: users could simply use their
mobile internet browser to use sites like Facebook and Twitter. Or, they could use apps optimized
for their device. Apple favored the app approach, while Facebook pushed for access through browsers.
And the reason behind each companies decision had everything to do with control. Using an
app meant dealing with the gatekeeper of the App Store: Apple. On the other hand,
if users accessed services through an internet browser like Safari, Facebook could exercise much
more control over their websites functionality and privacy, or lack thereof. Fortunately for Apple,
smartphone apps became user’s preferred method of access. And developers like Facebook were
forced to comply with functionality and privacy rules created by Apple. This is when tensions
between the two companies were ignited, and they would continue to grow over the next decade.
Facebook recognized the disadvantages position they were in, and began strategizing ways to
escape it. In 2011, they tried partnering with HTC to create smartphones with Facebook services
integrated directly into the operating system. That way, they could access valuable user data
without restraint. Facebook took this approach to the next level in 2013,
with the HTC First. It was the only Android device to be preloaded with Facebook’s
own user interface later called “Facebook Home.” This replaced HTC’s interface layer called Sense,
and gave Facebook unprecedented control over the entire operating system. This prompted
privacy concerns from reviewers like Om Malik, who noted that the company was free to collect
user data like never before. Facebook Home didn’t last long, though, with the HTC First
only selling 15,000 units, and being named one of the biggest tech failures of 2013.
But Facebook didn’t let that discourage them. Instead, they became even more ambitious.
Starting a new project that would allow Facebook to dominate the next big mobile device market:
smart glasses. Zuckerberg recently announced a partnership with Luxottica, the eyewear behemoth
that bought-out Ray-Ban. He revealed that Facebook would release their first pair of smart glasses
in 2021 under the ray-ban brand, which would serve as the ultimate augmented reality device.
Details about the product are still unknown, but many are speculating that the glasses
could suffer the same fate as the HTC First.
While the future remains to be seen, the conflict between Apple and Facebook today is quite clear.
It all started with a new privacy feature in iOS 14 called App Tracking Transparency. Which
requires companies receive permission from users before tracking them across apps and websites.
This is accomplished in the form of a pop-up window that asks the user if they’re okay with
being tracked by the app. They can select ‘ok,’ or ‘don’t allow.’ This approach to privacy is
nothing new to Apple. Here’s what Steve Jobs had to say about the topic back in 2010 [clip]
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Alright now Facebook took issue with requesting permission to track users. Which is quite strange
considering the company has argued for years that people preferred personalized and targeted ads.
And if that’s true, then users should have no problem giving Facebook permission to do so.
But the more likely reality is that people don’t like being tracked or having their personal data
collected, synthesized, and sold. That means people who opt off out Facebooks personalized
ads will become less valuable to advertisers. Zuckerberg estimated that businesses who use
Facebook’s targeted ads would lose 50% of their revenue as a result of iOS 14.
Facebook went on to take out full page attack ads against Apple in three US newspapers. They
featured the title “We’re standing up to Apple for small businesses everywhere.”
Which is a disingenuous way to frame an argument about privacy. The ad also mentions Apple’s
“forced software update,” that will, “limit businesses ability to run personalized ads
and reach their customers effectively.” But perhaps the best part is at the end.
Where it says, “small businesses deserve to be heard.” Not a very convincing statement
from a company who’s currently being sued by the Federal Trade Commission
for anti-competitive and monopolistic business practices. It’s clear that Facebook is waging this
war against Apple out of their own interests, since Facebook’s most profitable product:
personalized ads, would become less valuable if users don’t give permission to be tracked.
And that’s what this entire conflict boils down to: user privacy. Apple didn’t create the App
Tracking Transparency feature as a personal attack on Facebook or small businesses.
They did it to protect their user’s privacy. And they have a track record to prove their intent.
Apple already added Intelligent Tracking Prevention to Safari,
location fuzzing in Maps, end-to-end encryption in iMessage and FaceTime, Random identifiers in Siri,
email hiding when Signing in with Apple, and as much on-device processing as possible to
keep user data off of Apple’s own servers. In fact, many people have alleged that Siri fell
behind other competing voice assistants due to Apple’s refusal to leverage user’s personal voice
data. Not to mention the FBI publicly pressuring Apple to create a backdoor to the iPhone in 2016,
and Tim Cook refusing. That’s just a taste of Apple’s record on user privacy.
Now what does Facebook’s look like? Well, they have longstanding history of
privacy abuses and mishandling of user data. In 2007 Facebook started allowing
companies to track what users bought online, then notify their Facebook friends about it,
all without the user’s consent. In 2011 Facebook broke privacy promises by allowing
third party apps to access nearly all of a user’s personal data, instead of
only accessing data they needed to operate. This prompted a lawsuit from the FTC. In 2014 Facebook
conducted a mood-manipulation experiment, that included over half a million unsuspecting users,
to demonstrate how positive or negative posts could influence someone’s emotion. In 2018,
it was revealed that Facebook knew about Cambridge Analytica’s data theft of over 50 million users,
and did nothing about it. But perhaps the clearest example of Facebook’s position on privacy,
is this 2010 quote from Mark Zuckerberg himself. He said, “The rise of social networking online
means that people no longer have an expectation of privacy. That social norm is just something
that has evolved over time.” So through their own words and their own actions, Facebook has
made it clear that privacy is of little concern while exploiting user data to maximize profits.
Facebook said they would support Epic in its lawsuit against Apple. Which is quite interesting
considering the two multi-billion dollar companies are taking the same strategic approach against
Apple. Epic claimed they were standing up for small businesses who were hurt by Apple’s 30%
App Store commission. Facebook is saying they’re standing up for small businesses who are hurt
by not being able to track as many people as possible. But both companies are using the “small
business” buzzword as a proxy for themselves. Facebook doesn’t actually care about helping
small businesses when they suppress competition at every turn. Epic doesn’t care about helping
small businesses when they asked Apple to allow, quote, “Competing payment processing options… in
Fortnite and other Epic Games software.” Epic wasn’t requesting that Apple remove their 30%
App Store commission. They were requesting a personal exemption, just for themselves.
That’s why, whenever investigating conflicts like this one with Facebook and Apple,
a general rule of thumb is to follow the money. Facebook’s primary source of revenue is from
advertising. While Apple’s is from hardware. In order for Facebook to continue maximizing profits,
their advertising platform has to be as valuable as possible.
Which translates to offering advertisers as much data on their users as possible.
In Apple’s case, their hardware has to be as appealing as possible. By offering privacy
features that other platforms don’t. So if you’re wondering who’s right or wrong in this story,
it really comes down to who you are. Apple and Facebook users would likely agree that
they want control over their personal data, and want to give permission before being tracked.
While businesses who use personalized ads to make money would likely disagree.
But I think there’s one thing we can all agree on, now that Apple has grown to become the largest and
richest company in the world, they will continue to be targeted by other companies like Facebook,
Epic Games, and Spotify, if that means they have a chance at making even more money.
Alright guys thanks for watching till the end, don’t forget to subscribe to
help decide which topics I cover, and I’ll see you in the next video.