Apple, Facebook Trade Barbs Over Privacy-Focused Business Models

conflict between

Apple Inc.

AAPL -3.50

Facebook Inc.

FB – 2.62%.

was reinforced when the leaders of the two technology giants spoke publicly about privacy, the impact of algorithms and competition, and proposed visions for the future of the internet in the form of a duel.

Without directly mentioning Facebook, Apple’s CEO.

Tim Cook

On Thursday, he gave a speech in which he sharply denounced conspiracy theories that are being weeded out of the algorithms and talked about a new privacy tool that the iPhone maker plans to implement in the coming months. Mr. Cook also made a connection between the recent social unrest and the broader argument that application tracking tools are turning consumers into advertising products.

Facebook CEO

Mark Zuckerberg

on Wednesday called Apple one of its biggest competitors and accused the company of using its platform to hinder Facebook applications. Mr. Zuckerberg used to argue between ad-supported players like his company, which offer free apps with targeted advertising, and privacy-focused, paid services like those Apple supports for consumers.

Days of duels sharpened the battle between two of the world’s largest and most influential companies over key elements of how the technology industry works. The battle is taking place in a context of increasing regulatory control by the technology giants. Facebook has been sued by the Federal Trade Commission and 46 states over allegations of anti-competitive behavior. Apple also faces accusations from its technology competitors that its practices restrict competition. The two technology giants deny the misdeeds.

In his remarks at the Data Protection and Consumer Privacy Conference on Thursday, Mr. Cook talked about what he called the theory of technology that rewards participation and algorithms that help spread disinformation and conspiracy theories to collect user data for advertising purposes.

If a company is based on misleading users, on using data, on choices that are not choices at all, then it is not worthy of praise – it is worthy of reform, Cook said. He went on to say: It is high time to stop pretending that this approach is not worth the polarization, the loss of trust and, yes, the violence. A social dilemma must not become a social disaster.

The upcoming change is part of a series of features Apple has added over the years to improve and protect user privacy.

Photo:

Daniel Acker/Bloomberg News

Cook’s speech came after Apple reiterated a few hours earlier that it plans to allow users to restrict the way applications track their fingerprints. This spring, users will get a new feature that allows them to track ads only if consumers agree to it after making a request on their iPhone or iPad. (The beta version will be available to test users sooner.) Updating the mobile operating system’s software will ensure that Facebook or other companies will no longer be able to collect someone’s Ad ID without permission.

In a comment to investors Wednesday after Facebook posted record profits, Zuckerberg tried to use Apple’s privacy as a way to disadvantage Facebook with its platform. He stated that Apple’s iMessage service is pre-installed on every phone, and complained that Apple is using tools to promote that service.

Apple has every interest in using its dominance of the platform to disrupt our applications and those of others, which they choose to do regularly, he said. This affects the growth of millions of businesses worldwide. Apple did not respond to a request for comment on Mr. Zuckerberg’s statement.

At the heart of their dispute are surprisingly different but interconnected business models. Apple gets most of its revenue from selling iPhones and other devices, although it has a growing services business based in part on its ability to distribute applications such as Facebook. The Social Media giant derives much of its revenue from digital advertising based on its ability to target users based on their interests and habits, but it relies on Apple’s hardware, which many Facebook users use to access its applications.

Example of a custom prompt you can use to track ads on Apple’s iOS 14 mobile operating system

Photo:

apple/reuters

Some of these companies are increasingly at odds with each other, as Apple has developed a messaging platform in recent years with features that make it easier to send group calls and has less advertising activity.

Facebook issued a warning Wednesday specifically citing Apple’s mobile operating system software, iOS 14, as a risk to the company’s business this year, although the company also said revenue growth would remain steady in the first two quarters. Facebook has become the world’s largest social network with about 1.85 billion users in the last quarter, and its communication tools WhatsApp and Messenger are among the services that compete directly with Apple’s.

Last Wednesday, Apple’s spring plan to implement new privacy features was revealed in a new online report from the company detailing how personal data is collected and marketed by third parties.

The upcoming change is part of a series of features Apple has added over the years to improve and protect user privacy, and to integrate those efforts into its marketing. For example, the iPhone asks the user for permission for applications that want to use the device’s microphone. For example, if you use Skype.

Apple and Google have one of the most famous rivalries in Silicon Valley but behind the scenes they are betting on a deal worth $8-12 billion a year, according to a lawsuit filed by the U.S. Department of Justice. So they became dependent on each other. Photographic illustration: Jaden Urby.

Apple’s Ad ID is a set of numbers used by digital advertisers and data brokers to determine where users go online, which is useful for targeting ads.

Some in the applications industry fear that the opt-in requirement could lead to many users refusing the application, which would reduce advertising rates and create new problems for small businesses trying to effectively reach their target audience.

A survey by Tap Research Inc. found that 85% of those surveyed would not allow the app to track them if given the choice.

In September, Apple announced that it was delaying last fall’s privacy policy change until early this year to give developers time to make the necessary changes. The feature film was announced last June.

On Thursday, Mr. Cook made it clear that Apple is going ahead with its plans. He stated that the company’s actions are necessary to protect users’ privacy and argued that misinformation disseminated by social enterprises using algorithms is harmful to society.

Too many people still wonder how much we can get away with. If they have to ask: What are the consequences? said Mr. Cook. What are the implications of prioritizing conspiracy theories and incitement to violence based solely on high participation rates? What are the consequences of content that is not only tolerated, but even useful, and that undermines public confidence in life-saving vaccinations? What are the consequences if thousands of users join extremist groups and maintain an algorithm that recommends even more extremists?