Apple and Facebook trade accusations over data privacy

(Irish Times)

Escalation comes as both companies face antitrust scrutiny from regulators

Facebook has accused Apple of privacy shortcomings and abusing its market power after the iPhone maker took a swipe at the social media platform’s data collection practices.

The war of words between the two Silicon Valley groups unfolded after Apple wrote in a letter to pro-privacy civil rights groups that Facebook’s business model – which relies on collecting user data from its platform as well as from browsing activity off-platform to target advertising – showed the company had a “disregard for user privacy”.

By contrast, the phonemaker cast its ads business as “privacy-forward”.

Apple sent the letter, first reported by Bloomberg, to reassure civil rights groups that it still intended to introduce new privacy restrictions with its iOS 14 operating system, including requiring apps to get users’ explicit permission to gather ad targeting and tracking data.

The rollout of the restrictions, due to come into force this year, was delayed until 2021 after developers complained that they were unprepared for the changes, which threaten to wipe billions of dollars in revenue from ad-reliant businesses.

Late on Thursday, Facebook released its own scathing statement that highlighted a number of privacy concerns about Apple’s business and called the iPhone maker’s letter a deliberate “distraction” from those issues.

It also claimed Apple was “using their dominant market position to self-preference their own data collection while making it nearly impossible for their competitors to use the same data”.

“They claim it’s about privacy, but it’s about profit,” Facebook said. “We are not fooled. This is all part of a transformation of Apple’s business away from innovative hardware products to data-driven software and media.”

The escalation comes as both companies face antitrust scrutiny from regulators and politicians. Apple has also come under fire over its 30 per cent commission on developers’ revenues from its App Store, although it bowed to pressure on Wednesday, announcing it would halve the rate for small businesses.

Facebook has also become an increasingly vocal critic of Apple’s iOS 14 plans, with executives warning on multiple quarterly earnings calls in 2019 and this year that the measures would hurt the social media company’s revenues.

More recently, Facebook has argued that the restrictions would be damaging to small businesses on its platform that were already suffering during the global pandemic by hampering their ability “to accurately target and measure their [ADVERTISING]campaigns”.

Publishers, app makers and adtech groups have also protested against the changes. Last month, a coalition of trade groups in online advertising filed a legal complaint with the French Competition Authority to block the restrictions. They argued that Apple was holding itself to lower privacy standards in order to bolster their own revenues.

Apple contends that its advertising model would be subject to the same restrictions as other developers and that it introduced the changes to offer users more control, rather than to squeeze out competitors.

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