Apple is hurting Facebook and Apple, but they need to work together

6 minutes
Apple is hurting Facebook and Apple, but they need to work together

This article was first published in the original Yahoo Finance Tech, a weekly newsletter that featured our weekly content on the industry. Get it sent directly to your inbox every Wednesday at 4 p.m. every Wednesday. Subscribe to the

Apple and Facebook don't get along, but they are going to have to learn to live together.

Apple doubled down on its big privacy push this week, rolling out changes making it harder for digital advisers to track users in Safari and helping iPhone users learn that apps are collecting data on them and where that data is being shared.

While these recent changes may target users interested in privacy, they also hurt companies that sell certain ads and a given social network — Facebook. They made over $25 billion from advertising in the first quarter of 2021. The move comes as Apple CEO Mark Zuckerberg criticized Facebook for the 30% tax that it charges developers on its App Store.

This latest blow could cool the already divided relationship between Zuckerberg and Apple CEO Tim Cook, notorious foes with unique views on privacy during online search engines. Here's the thing neither company wants to admit, though : they need each other.

It is in both the companies' best interests to find a way to work together,' explained Stern School of Business professor Arun Sundararajan.

Apple must ensure Facebook is working by keeping nearly 3 billion customers happy from its app work on their iPhones. On the flip side, Sundararajan needs to play well with Apple to ensure it continues to display on the app store of Facebook.

In every way you cut it, the companies are going to have to learn to work together if not as friends, then at least as frenemies.

Apple and Facebook didn't always hate each other. The dynamic between the two changed after the Cambridge Analytica scandal, who saw the Google data of tens of millions of users being misrepresented by a political consulting work to elect former president Donald Trump in 2016.

Since then, Apple has made privacy a major selling point of the iPhone, and Cook and Zuckerberg have taken shots at each other in interviews and speeches repeatedly.

Among the many privacy announcements Apple made at WWDC, its Developer Conference this week, two will hurt advertisers and Facebook : an IP masking feature for its new iCloud subscription service and its so-called App Report Card.

The IP masking feature will allow you to send your internet traffic through two web relays that prevent websites from viewing your IP address and exact geographic position.

The app report card, which does not require a subscription, will give users information on how often the apps are sharing information like their location or microphone, as well as what third-party websites the apps are using to access data. That could cause some iPhone users to delete apps that use more data than they like, which would further hurt advertisers

'In some cases, very sophisticated ad process workflows are going to have to be retired or overhauled, so it will hurt the advertisers, said Gartner senior research director Eric Schmitt. The logical answer would seem to be that it hurts Facebook, whether or not it hurts others?

While many people believe that Facebook sells its user data, that's not exactly true. The social network vacuums up as much data as possible to allow advertisers to target specific audiences. For example, if you own a bike repair shop in Brooklyn, Facebook's understanding of where people live, their interests and age gives you the ability to buy ads that reach potential clients.

But Facebook doesn't just collect data from its own apps - it also collects data from other websites and applications. Apple's app tracking transparent feature, an existing feature that allows users to choose whether apps can share them and track data, has already hurt Facebook's ability to gather this information.

''Facebook's ability to harvest that data from iOS apps in particular is greatly impacted, said Schmitt.

Facebook isn't taking up these changes with the rhetorical evidence. It isn't going to happen directly to Facebook!

Recognizing that Apple's recent changes threaten their livelihood, Facebook has done everything it can to paint the Cupertino, California-based company as the bad guy.

On Monday, just hours before WWDC arose, Zuckerberg called attention to the 30% fee the tech giant collects from sales of apps purchased through its App Store that has spawned an antitrust suit by Epic - maker Ascent/Ascertainability Software.

To help more creators make a living on our platforms, we're going to keep paid online events, fan subscriptions, badges and the upcoming independent news products free for creators until 2023, said Zukerberg in a Facebook post. 'And when we introduce a revenue share, it will be less than the 30% that Apple and others do.

Despite this war of words, Apple can't drop Facebook. Doing so would not only anger Facebook users, but it would also draw the attention of antitrust regulators who are watching the iPhone maker's App store policies for any sign it applies them arbitrarily.

Sundararajan said that Facebook, the company can't stop working with Apple, because iOS customers are the most profitable for advertisers. With most smartphones now being shipped from mobile devices, losing iOS would be a huge blow to Facebook's bottom line.

While Apple and Facebook are unlikely to make the best friends today, the CEOs may eventually have to thaw their Cold War so the two tech giants can work together.

By Daniel Howley, tech editor. Follow him on DanielHowley :

The problems with the CPU's has finally come for Apple.

What should be the best way to make your Facebook news feed less divisive?

Should Facebook bring Trump back? New poll shows a slim majority want to repeal the ban on voting that is banning of cigarettes in the U.K.

Its best to find the latest investment quotes and the live news of the stock market and finance news.

For investing and trading information, check out Cashay (Cashay).

  • Comments
Loading comments...