Apple v Facebook: privacy face-off

“We believe users should have the choice over the data that is being collected about them and how it’s used.”

- Tim Cook, CEO of Apple

In a perfect world, the pandemic would be over, travelling would be affordable and our social media platforms won't track our every single move. However, this is 2021, we are still in a pandemic, can't travel, and big social media platforms such as Facebook know exactly what’s in our online shopping carts.  Big companies justify ad tracking by claiming that our ads must be relevant to our interest. Users typically don’t have a choice on whether they want to be tracked or not, but thanks to Apple's new iOS 14.5 update, users can 'Thanos - snap ad trackers into dust'.

What is Apple’s new privacy feature?

Apple's latest iOS update includes the App Tracking Transparency (ATT) feature. This highlights who and what is tracking your iPhone and it provides you with the options to stop tracking. This doesn't stop the ads from completely showing up on your social media platforms, however, the ads will be less targeted. When you open an app (such as Facebook) for the first time after the update, you will receive a pop-up notification informing you that the app wants to track you across the internet. You can refuse permission to do this and stop websites and companies from amassing the data they use to deliver micro-targeted ads- data such as the places you have been, your details to health information and so forth. It doesn't stop them from tracking your activity on their platform, however, it does prohibit them from collecting data on your behaviours outside of their platform.

What about Android users?

For Android users, similar changes could be implemented with Google reportedly considering the introduction of similar privacy and anti-tracking changes. This has the potential to backfire for them as advertising also makes up the most of the company’s $US181 billion revenue. 

According to the ABC, Google has already taken steps to phase out third-party cookies on its Chrome web browser, and is working on tools that enable advertisers to target groups of users, rather than individuals directly. 

Why is Facebook affected?

This new update poses a threat to a company like Facebook, which is known for tracking your activity across platforms, collecting your data and selling it. It's a known fact that the company's business model relies heavily on ads. In 2020 alone, 97.9% of Facebook's global revenue was generated from advertising, with only around 2% generated by other fees revenue and payments. By implementing the new iOS privacy feature, Facebook may lose up to 7% of its revenue. In monetary terms, it's approximately around $US2 billion per economic quarter. 

Facebook CEO Mark Zuckerberg expressed his dislike of the feature, stating that "Apple may say that they're doing this to help people, but the moves clearly track their competitive interests". Even though the feature won't ruin the company, it does highlight where they are vulnerable.

Is Facebook the only affected company?

During Facebook’s January earnings call, Zuckerberg claimed that the update ‘impacts the growth of millions of businesses around the world’. Facebook isn't the only company that may suffer a loss in revenue because of the feature, however, they are one of the most affected. Alongside them, every company, big or small, that makes use of data collection to sell the data to make a profit, will be affected by this feature, with the potential to experience a loss in revenue. Both Facebook and Instagram launched their campaign against Apple’s privacy update, including pop-up notices in their iOS app, encouraging you to ‘help keep Facebook/Instagram free of charge’ by allowing them to track and collect your data. In terms of small businesses who advertise through companies such as Facebook, identifying and reaching their target audience can potentially get harder and as a direct result, limit their reach, brand awareness and overall growth.

For us as individuals, we may welcome the change to a more private and secure online experience, however, for many companies and businesses, the update poses a threat to their future growth.