Ten years war on internet business

Apple CEO Tim Cook (L) and Mark Zuckerberg, CEO and founder of Facebook.

Getty Images (L) | Reuters (R)

In October 2018, Apple Paul CEO Tim Cook criticized the business practices of Big Tech competitors in an influential speech at a privacy conference in Brussels.

“Every day, billions of dollars change hands, and countless decisions are made based on our likes and dislikes, our friends and families, our relationships and conversations. Our desires and fears, our hopes and dreams,” Cook said. “These scraps of data, each one is not harmful enough on its own, are carefully assembled, synthesized, traded and sold.”

Although Cook did not call Facebook by name, it was clear that Mark Zuckerberg’s company was one of the targets. Facebook has built a tremendously successful business by hovering its users’ data to inform its targeted ad system. Its revenue last quarter was 20 20 billion, and about 99% of that comes from advertising.

The speech was the only one in a series of public debates that Cook and Zuckerberg have held together for nearly a decade. The tension between Facebook and Apple Pal dates back to the iPhone’s infancy and the search for control over the next wave of computing.

In the 2014 cover story of the time, for example, Zuckerberg criticized Apple Paul and Cook’s attitude towards privacy:

“One of the frustrations to me is that a lot of people increasingly find an advertising business model to be the equivalent of being out of alignment with your customers.” Zuckerberg told Time. “I think that’s the most ridiculous idea. Do you think that because you can pay Apple Paul that you somehow manage with them? If you were to configure with them, they would make their products much cheaper. . “

The war of words over the past decade highlights the fundamental differences of opinion between the two giants on how to do business on the Internet.

From Facebook’s point of view, the Internet is the Wild West, with many rival platforms offering innovative services for free. You can’t pay for them with your money, but you do pay by allowing your data to be tracked and packed so that advertisers can flop the things you want to buy right in front of your face when you travel between devices and services.

According to Apple Paul, the Internet is an extension of the personal computing revolution that the company started in the 1980s, and your phone is the most personal device of all. You need to know what the companies will do before you share the information collected by that phone.

A vague fight

Facebook CEO Mark Zuckerberg appears on the stenographer’s back monitor as he testifies remotely during a Senate Commerce, Science and Transportation Committee hearing: Washington DC.

Michael Reynolds | Pool | Getty Images

The war of words ended last week with Facebook’s two-day campaign against Apple. When the ads are designed to warn you about changes to the iPhone’s operating operating system, the so-called foul ads will track your personal data, such as location and browsing history, which companies like Facebook use to target their ads. Alerts give you the option to block tracking before using the app.

Facebook claims that Apple’s move is designed to crush small businesses that rely on targeted advertising to reach their customers online. Apple’s move – without proof – also warns that Apple’s move will stop app developers from offering their customers free, ad-supported apps. Instead, they will have to charge customers with digital subscriptions or other fees. Convenient for Apple Pal, it takes part in transactions made through its platform, including purchases or subscriptions that users use through apps downloaded to its App Store.

Facebook painted a deceptive picture of the Apple moment in the campaign: here is a company that has full control over the rules of its platform, with changes designed to accept small businesses and push them into a paid model, with Apple taking the cut. Facebook delivers those messages in a glossy website featuring newspaper ads, blog posts, Instagram posts, and small business owners who use Facebook for advertising.

Apple Play pushes back Facebook’s allegations. The company said that the five-up you see in apps is only designed to let you know when and how an app plans to track you, not a complete ban on tracking. Application makers like Facebook also have space in trap-ups and other screens so why should you allow tracking. Apps are still free to collect all the data on you that they were before, but you must intentionally allow them to do so. According to Apple Pal, it is the latest in a series of privacy-focused features that have been added to products over the years.

A popup window will see a mockup of iPhone users before using an application that tracks their data. This image was provided by Apple Pal.


The roots of squabbles stretch back more than a decade.

In the childhood of the iPhone, there was a lot of discussion about what mobile internet should look like. Will he look at the Internet on a desktop PC, where people use a mobile web browser to visit web sites with almost everything built on published standards? Or will users switch between a collection of Internet-connected software software “applications”, giving companies with mobile platform ownership more control?

Facebook, born on the open Internet, favors the previous option and pushes for rich web applications written on emerging standards. But it lost the fight largely because of Apple Pal, which pushed the app model as the default way to complete tasks on the iPhone, then insisted that its own App Store would be the only legal and easy way to find and install those apps. (Google played smartly on both sides, investing in the Android mobile platform and its own Google Play app store, as well as using its Chrome web browser to build and influence web standards.)

As the future became clearer, Facebook tried to make its own smartphone, so it didn’t have to accept so much control over Apple Pal or Google. The device never saw the light of day, and instead developed a skin software “skin” for Facebook Android devices that featured its own services. It was also a flop.

Today, Facebook is now adhering to the ownership of the next major computing platform so that it does not have to play again by another company’s rules. That’s why it is currently developing products such as digital glasses, which the company expects to launch in 2021.

But in the meantime, Facebook will have to deal with Apple Pal.

Facebook’s final game is unclear

It is ironic that Facebook accused Apple of abusing its market power last week, a group of FTC and state attorney generals accused Facebook of breach of antitrust and recommended the company break up.

On top of that, Facebook’s argument highlights its own grip on the digital advertising market. Small businesses would not have had to rely so much on Facebook if Facebook had a capable competitor to advertise through these companies.

Apple Paul faces similar government scrutiny, although no formal antitrust claims have yet been made. In October, the House Judiciary Subcommittee on Anti-Trust released an epic report on the “monopoly power” of four major tech giants, accusing Apple of using controls of the App Store to squash potential competitors.

Both companies have denied claims that their businesses violate antitrust laws. But Facebook has now created an environment in which the two giants, who are facing distrust tests in the US and around the world, are trading. More Guilty when it comes to abuse of market power.

It’s also hard to say what Facebook’s end game is here. Apple is not going to backtrack on the main privacy feature for the iPhone, and will not risk losing millions of users by yanking its apps from the Facebook App Store.

Steve Sutterfield, Facebook’s director of privacy and public policy, told CNBC in an interview this week that the company would still abide by Apple’s new rules, and that there was no prospect that Apple and Facebook would violate them to ignite legal battles like Fortnight. Is. (Facebook said last week that it would support Epic in the lawsuit against Epic.)

“Our goal is simple,” Sutterfield said. “We want Apple to start listening to the moment. They withdrew this policy in June without any meaningful consultation … given the far-reaching impact, those important businesses can plan for it.”

It is also difficult to buy Facebook’s stated argument against P-P. For years, the company has argued that its users prefer personalized and targeted ads that enable its data collection, as opposed to random ads delivered to a wider audience without a target. If true, users should have no problem enabling tracking when Apple shows them the popup.

In August Gust, Facebook overcame that argument when it published data from a study that showed that tracking enough people would reduce revenue by 50% through its third-party ad networks. The company also warned investors this year that its own revenue will hit when Apple begins implementing the Pull tracking tool.

Instead of a notification that Facebook will show you the moment, Facebook said it would prefer to use its own privacy checkup tools to help limit what data users can share.

Apple Play said its customers want more privacy control built into the iPhone. After years of criticizing Facebook’s business practices, the company has regularly added privacy features to eliminate the abuse that appears on its devices.

Asked why companies like Google and Facebook are allowed to thrive on iPhones despite criticism of their practices, Cook said in a 2018 interview with Cook Xios: “Look what we’ve done with the restrictions we’ve created. . “” We have private web browsing. We have an intelligent tracker prevention. What we’ve tried to do is come up with ways to help our users during their day. “

It wasn’t just Apple Paul pushing back against Facebook’s arguments. Groups of small business advertisers, the same people Facebook said it was trying to save, took to Facebook’s hashtag #SpeakUpForSmall and complained about not being noticed compared to Facebook’s larger ad clients on the day the campaign began.

And Bloomberg published a report earlier this week that had similar complaints from advertisers on the company’s automated ad purchasing tools. BuzzFed published a story on Tuesday quoting Facebook employees who, like small business advertisers, were just confused about the anti-Apple moment crusade.

As part of that, Facebook spokeswoman Ashley Zandy told CNBC that the company has heard from several subsidiaries and allows its employees to speak freely and question the company’s strategy.

“I think we’ve seen a lot more balanced and declarative coverage,” Sutterfield said. “I think we’re happy.”