Apple+and+Facebook

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Meshal Muhammad

October 1, 2021

An ongoing dispute over privacy concerns between Facebook, Inc. and Apple Inc. continues to gain friction after the iPhone maker introduced changes in its iOS software, giving users the option to opt-out of being tracked by apps.

Facebook shares took a hit after the news broke, falling 3.6%. Dani Lever, a Facebook spokesperson, said that a choice between personalized services and privacy is a “false tradeoff” and Facebook offers both.

Lever also criticized Apple’s new policy and the effect it has on small businesses.

“Small businesses lose out under Apple’s new rulings,” she said. Lever stated that Facebook is speaking out on behalf of businesses and developers who are “hurting” due to the newly implemented policies.

Facebook, as a company that completely relies on advertising revenue for income, is now on edge. The company issued a note to advertisers saying that it is harder to track the effectiveness of ads due to Apple’s new policy and giving an estimate of 15% of ad performance being underreported due to the policy.

With the holiday season looming, Facebook’s most profitable quarter, advertisers are willing to pay higher prices for ad slots due to increased willingness from consumers to purchase, that is if Facebook can get to them. Facebook also explained that the policy could harm earnings and that it is working on tools to better track the performance of advertisements to reassure advertisers.

This dispute between the CEOs of Apple and Facebook goes back to the 2010s. In 2014 when the government asked Apple to unlock the iPhone of a gunman who killed 14 people in a San Bernardino, California massacre, Tim Cook, Apple’s CEO, said that if Apple were to create a technology able to unlock iPhones, the technology could be used for other less honorable purposes and that Apple was not based around collecting user’s data.

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Cook’s statements regarding privacy came much to the chagrin of  Mark Zuckerberg and other Facebook executives who explained that Apple’s privacy consciousness contradicts its business dealings in China.

Another incident that  sparked conflict between the two companies occurred in 2018.This incident came about from a question asked by an MSNBC reporter, who asked Cook what he would do if he was in Facebook’s position, regarding Facebook’s data collection practices for which the company was on trial for at the time. “I wouldn’t be in this situation,” Cook said.

Ultimately, this dispute boils down to who will dominate the internet in the decades to come.

Apple currently has the greater market capitalization of the two companies at about $2.4 trillion in addition to a more favorable public image as the “protector of privacy”. Facebook, which has a market capitalization of $996.9 billion, perhaps feels the need to catch up to Apple.  However, the likelihood of it doing so not high if Apple keeps rolling out privacy policies that hinder Facebook’s ad placements and subsequently, revenue growth..