It was bound to happen, the opening salvos of what is shaping up to be a epic battle between Facebook and Apple have been launched over data collection on the AppStore. Facebook seems to be scrambling and attempting to cast Apple as ‘the bad guy’ trying to ‘keep the little man down’. Apple claims to not want to force Facebook to change their business model, but simply wants it to be more transparent with it’s data collection practices.
Where the battle lines were drawn – Round 1
Way back in late June of 2020, Apple announced at WWDC that they would require apps to be more transparent with the data collection practices and force app developers to request consent prior to most data collection.
For it’s part Facebook was mostly silent on the matter until in early September (just ahead of the iOS14 rollout) Facebook published a blog post detailing their plans for the changes and warning that the Audience Network may see such material losses on iOS, that publishers could expect upwards of a 50% loss of Ad Publisher Revenue returns once personalized ads were disabled. It further went on to claim that the restrictions may be so material, it may consider disabling the Audience Network on iOS entirely.
Considering the feedback Apple quickly followed with it’s own blog post saying that it would delay the changes until early 2021, followed by updating their developer App Guidelines.
What’s clear here is that Apple is very clearly committed to this course of action and that the changes are to promote transparency around how personal data is collected. This likely also positions it well to deal with legal efforts such as the EU’s General Data Protection Regulation and California’s amended version of the CCPA going into effect over the next few years.
The prelude to battle – Round 2
Things died down publicly, but resurfaced this past week. On December 8th Apple started enforcing the disclosure of data collection practices per their requirements. Facebook’s App was then forced to disclose data collection and use, or face being restricted from updating the app on the AppStore and risking delisting of the App entirely.
With the update to iOS 14.3 on December 14th these collection points because publicly visible on the AppStore.
For it’s part the Facebook App’s disclosure looks like this:
Less then two days later, Facebook took out multiple full page ads in several newspapers (The New York Times, The Washington Post, and The Wall Street Journal ) and issued a blog post accusing Apple of harming small businesses, having double standards, and claiming Apple is doing this for profit.
Apple’s CEO Tim Cook had the following to say:
Facebook, undeterred, has also starting using push notifications for their apps warning users of the danger to their advertising as has been reported by 9to5Mac.
Analysis before the battle
After two rounds, it’s clear that Apple fully intends to require consent for collection in early 2021. Facebook is likely correct in that for companies heavily leveraging personalized targeting are likely to see material losses unless they modify their marketing plans.
With the above said, the moves by Apple do help large sections of developers become partially compliant with the privacy regulations being introduced around the world. What is concerning however is if the US Government will agree with this and if it will find Apple’s position over the AppStore an illegal monopoly as companies such as Epic Games are asserting. It’s unlikely that any court battles will resolve prior to the enactment of the consent requirements and companies should not expect a court order halting the advancement of this practice.
For it’s part, the disclosure of data collection practices is dangerous to Facebook for several reasons. Users may decide to not install the app, or once installed, not provide consent, weakening Facebooks reach and data collection for it’s advertising network. Facebook is also facing increasing scrutiny globally as governments feel it has had a adverse impact on society from it’s alleged monopoly position as the premiere force in Social Media. It’s ironic that several of the things they accuse Apple of, they are being sued by the US government for in their own antitrust case.
Further Facebook is likely correct that this will have material impact to their bottom line on Apple’s platforms, which account for upwards of 50% of mobile traffic in the USA. This could proceed to cause the loss of viability in it’s AudienceNetwork on iOS, shrinking revenue further.
Companies reliant on Facebook or it’s advertising network thus need to prepare for what would happen for sharp reductions in return on investment from Facebook including what total loss of the ability to use Facebooks Ad Network for targeting looks like for their marketing plans.
Further, companies are running out of time to ensure their own apps pass Apple’s privacy reviews and prompt for consent at the correct times. Will we see companies follow Github’s lead as detailed in ‘No Cookie for You‘? Will we see massive investment into refactoring of existing apps? Adoption of new practices? The year of 2021 will show us all this and more.
One thing is clear – this isn’t settled yet and more is yet to come in the next several months.