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Facebook Launches Campaign Blasting Apple’s New Privacy Features as Hurting Small Businesses

Social giant said it will support Epic Games' lawsuit against Apple over App Store practices

Facebook Mark Zuckerberg, Apple Tim Cook
AP

Another front in the war between Facebook and Apple has erupted.

The two tech giants fighting over Apple’s move to implement a new opt-in requirement for users with iOS 14 devices to grant permission to be tracked for advertising purposes.

Facebook is framing the dispute as one that will harm millions of small businesses that use its social networks to reach potential customers, and alleges that Apple is making it harder for advertisers to track consumers in order to boost its own profits.

On Wednesday, Facebook launched a multipronged attack on Apple, including launching a new page on its site featuring testimonials from SMB customers who claim their businesses will be hurt by the iOS 14 privacy feature changes. In addition, Facebook ran full-page ads today in New York Times, Washington Post and Wall Street Journal for the campaign, with the headline, “We’re standing up to Apple for small businesses everywhere.”

“We believe Apple is behaving anti competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses,” said Dan Levy, VP of ads and business products, speaking on a call with reporters. “This is not really about privacy for them. It’s about an attack on personalized ads and the impact it will have on small business owners.”

In its escalating confrontation with Apple, Facebook also said it is “committed to providing relevant information in the Epic Games litigation” regarding “how Apple’s policies have adversely impacted Facebook and the people and businesses who use our services.” Epic, the company behind megahit game “Fortnite,” is suing Apple over the tech giant’s App Store policies, including Apple’s requirement that developers use its in-app payment system and Apple’s standard 30% cut of revenue.

Apple had previously announced new App Tracking Transparency elements of iOS 14 at its Worldwide Developer Conference in June. Those were supposed to go into effect this fall with the release of the operating system, but Apple extended the deadline for the opt-in privacy requirements until early 2021, specifically for access to the Identifier for Advertisers (IDFA), to give app publishers more time to comply with the change. By contrast, previous versions of iOS have had opt-out privacy features, and the move to require explicit consent from users to allow apps to track them is expected to significantly curtail the ability for advertisers to use IDFA.

Under the new policy, Apple will require apps to display “a discouraging prompt” asking users to allow ad-tracking on their devices, “which will hurt their ability to build their businesses,” Levy asserted.

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. App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice.”

An Apple rep also pointed to comments made by Craig Federighi, Apple’s SVP of software engineering, at the European Data Protection & Privacy conference in Brussels last week.

“It’s already clear that some companies are going to do everything they can to stop the App Tracking Transparency feature… and to maintain their unfettered access to people’s data,” Federighi said. “To say that we’re skeptical of those claims would be an understatement. But that won’t stop these companies from making false arguments to get what they want. We need the world to see those arguments for what they are: a brazen attempt to maintain the privacy-invasive status quo.”

On the call Wednesday with reporters, Levy said Facebook has already been factoring the impact of iOS 14’s privacy features in its earnings forecasts but said that small businesses would be far more greatly hurt. “Right now, [small businesses] need all the help they can get,” he said.

Facebook claims internal studies have shown that without personalized ads, small businesses saw a drop of over 60% of ecommerce sales driven by ads. In other testing, Facebook says, publishers have experienced a 50%-plus revenue decline when personalization was removed from mobile app ad install campaigns.

Apple’s iOS 14’s App Tracking Transparency policy is really a move that “benefits Apple’s bottom line,” according to Levy.

How so? Levy asserted that Apple wants to drive app developers to use Apple’s own personalized ad platform — which is exempt from the new opt-in prompt about tracking it’s requiring third parties to adopt. Less convincingly, Levy also suggested that small businesses would be forced to increasingly rely on non-advertising sources of revenue, like charging for subscriptions. That, he continued, would pour more money into Apple’s coffers because all payments through iOS apps are subject to the App Store “tax.”

In a PR move, Apple recently said that it would reduce the App Store fees for small developers (generating $1 million or less in app revenue) to 15% starting in January 2021. But all others will still pay the 30% fee. Spotify and Epic were among those slamming the move as lip service.

Facebook has butted heads with Apple several times in recent months. After Facebook publicly complained about Apple’s insisting on levying the 30% cut on live events paid through iOS apps, Apple agreed to a short moratorium through the end of 2020 — which Facebook also criticized and pointed out that the temporary suspension of the 30% fee excluded gaming creators. For its part, Facebook says it won’t take a cut of creators or businesses’ revenue for livestreaming events until at least August 2021, citing economic hardships inflicted by the COVD pandemic.

In addition, Facebook says it was forced to strip out games from the Facebook Gaming app for iOS because of Apple’s prohibition on apps that distribute code “in a store or store-like interface.”

Other privacy updates for iOS 14 have already gone into effect. Those include requiring developers to self-report privacy summaries for their apps in the App Store, and the ability for users to get more details into an app’s use of the microphone and camera. Also, iOS 14 will let users share only their approximate location, in addition to the option of blocking that altogether.

Pictured above: Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg